I used to be good about keeping an eye on them so it wouldn't escalate but haven't done that as much lately. I realized that actually the younger one instigated and initiated hitting and the older one would freak out and react more harshly. Forced apologies don't work so well here -- so I comfort the crying child and kind of speak for big sister by saying Sorry. I tell the younger one that she may not pinch or hit the older one (as if my 2 y.o listens

) and tell the older one I understand she's upset but we have to try to work through our problems without hitting.
Then I try to understand what the problem is -- dd1 wants to colour by herself but dd2 comes and grabs things from her. Then I used to set up both kids with stuff so they don't bug each other. That seemed to work really well when dd2 was a bit younger but I've slacked on that as of late.
Borrowing a page from Siblings Without Rivalry by Mazlich and Faber, I explain to dd1 that dd2 in not trying to hurt her by getting involved in her stuff, she finds dd1 fascinating and wants to be just like her/copy her/be with her, etc. That seems to help SOMEWHAT. Gotta haul out that book and refresh the parenting skills though as it's getting rougher these days. Good luck!