We already spoke about the value of saying the truth in Judaism. And how, the closer we bring ourselves to hold the truth, the closer we become to God Almighty, Whose seal (=signature) is EMET the truth; the ultimate reality (see here).
In the tractate of Yebamot (65b) the Rabbis explained that in certain circumstances PEACE (shalom) should be considered above the TRUTH. Now, this is an extremely delicate issue and this principle cannot be applied indiscriminately. The Rabbis then, gave a restrictive illustration from which we learn the dynamics between "truth" and "peace". Aharon haKohen, the brother of Moshe Rabbenu, was the champion of peace-making in the Jewish people. When two people would fight, he would go to each one of them separately and he would tell him, from his own mind, how much the other one regrets and feels bad about the fight. When they would meet, they would embrace and kiss each other, and go back to their friendship.
Aharon was so loved for his work in promoting peace that when he died, the Tora says that "KOL" Israel cried for him: every single individual felt indebted to him for his work in the promotion of peace.
It is important to mention that this mediation technique should be applied ONLY if there is no harm for any of the parties. However, if by modifying the truth, one of the parties will be harmed or would have his rights violated, then it is forbidden not to say the truth. If I know, beyond a doubt, that Mr. A is going to harm (physically, financially, etc.) Mr B, I cannot lie or even remain silent "to promote the peace." it is a Mitzva to save a fellow man from any kind of harm (lo ta'amod al dam re'ekha. Vayiqra 19:16).
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by Kasim Hafeez, from Aish.