Phineas is the first that comes to mind when associating the word "denial" with the book A Separate Peace. In chapter 2, Phineas discusses the bombing in Europe at a dinner with some adults, but later says, "I don't really believe we bombed Central Europe, do you?" (29). Finny questions the war's reality because it seems to far away from the fun summer they are having back in the safety of America. Back then, too, they had to go to movie theaters to watch newsreels about the war or listen to the news on the radio.
Today, we can turn on the TV and the most popular news about any war is up close and personal in our own living rooms. The war must have been difficult for a teenager to believe back then. Another issue that Finny is in denial about is the injury he sustained after Gene jounces him off of the tree. Finny's leg won't ever be the same again, but he still has hope that he'll be able to recover and be the athletic boy he was. However, in chapter 8, when Finny returns to Devon, he's really disabled and won't admit that he needs help. He says that he can "manage all right" but Bringer looks at how much trouble Finny is having and says, "How can you manage all right?" (108) as if to challenge Finny's reasoning. For other situations involving denial, also consider looking at Gene's understanding of his and Finny's friendship at the beginning of the book.