I definately think that you have to set the boundaries for fair fighting and that should include ABSOLUTELY no physical contact. You do not want your son thinking it's ok to resolve conflicts by hitting women, and you do not want your daughter thinking it's ok to hit men, because some will hit back. THAT particular part of their bickering really has to stop immediately.
That being said. My brother (who was 3 years older) and I bickered incessantly, it was a sport. It drove my poor mother nuts. One day she said(rather forcefully) "YOU TWO STOP FIGHTING!!!!"
We stopped bickering and looked at her like she'd grown three heads. "We aren't fighting" , we insisted. "Then what are you doing?" We just looked at her and shrugged.
I guess we were communicating, LOL. I don't remember my brother ever hitting me. EVER. My parents didn't allow it.
But I had friends who physically fought with their siblings and I thought they were crazy.
I think you just need to set the limits.