I would argue that the conflict in this excellent story has to do with perspective, as Bruno sees what is going on in the concentration camp from his perspective alone and is blind to the more sinister reality of what is going on. The conflict is therefore one of innocence vs. experience. In a sense, what is so fascinating about this story is that the conflict is resolved at the end as Bruno and Shmeuel enter the gas chamber with Bruno's innocence in tact. He still does not realise what is going on around him and is not aware of the reality of the concentration camps and the truth of the mass executions that are occurring on his doorstep.
In one sense, therefore, the resolution of this conflict shows the deep and abiding power of the imagination of children to construct their own fantasy and their inability to let the brute facts of reality penetrate their understanding. The resolution of the conflict ironically however involves Bruno's death, which could lead us to argue that Bruno's innocence has actually lost as he becomes one of the many casualties of the Holocaust that Bruno was blind to.