Head teachers have been warned not to "tip-toe around" religious and racial issues or risk increasing tensions. Instead, a report by the National College for School Leadership says the Iraq war is a chance to increase respect for different beliefs and faiths.
The advice is the outcome of a meeting of 20 head teachers from schools with a high number of ethnic minority pupils.
The report, entitled School Leadership and the war with Iraq, recommends running staff workshops to find ways of dealing with the war.
It also calls for a forum to promote visits by religious leaders to pupils.
'Valuing diversity'
The report says: "Debate needs to focus on how schools promote respect for people whose beliefs are different from their own.
"This is not just a question of tolerance, nor of teaching basic precepts through religious education, but a much wider issue of empathy, respect and valuing diversity."
It asks for a book of testimonies to be set up, inviting children, staff and the wider community to write about how it feels to be a Muslim, Hindu or Christian today.
The NCSL found that a "lack of knowledge about different beliefs seemed almost to be worn as a badge of honour by some teachers in our schools".
Some Muslim pupils were suffering from a sense of dislocation and confused identity.
'No fudge'
The report says: "A Muslim head spoke of children, born in Britain, who asked 'Why are we here, what are we doing in this country?'
"Others commented that many Muslim children did not have a strong sense of place in Britain."
The NCSL report refers to a climate of fear among staff and pupils, which had developed in some schools as a result of the war.
A spokesman said: "Some children are frightened of being tormented.
"Muslims fear being labelled as fundamentalists or terrorists, other pupils fear anti-American sentiment will turn to anti-British.
"Some children fear for their relatives' safety and some fear for their own safety in case of an attack on this country.
"Meanwhile, others are angry and hardened against any cultures or faiths they associate with Saddam�s regime."
The report adds: "There is understandable anxiety about opening up feelings and dialogue. To do so in a positive way, as a learning experience for pupils, is a key leadership challenge.
"This is not an issue to fudge, though easy to avoid. The challenge is about seizing the opportunity and opening up understanding in sustainable and manageable ways."