The turf war between between rival food vendors got bloody Wednesday when a halal chicken vendor allegedly cut his rival's arm on East 37th Street. We've previously heard about the feared "Halal Mafia" and wondered how far they'd go in defending their turf. All the way, it seems: Walid Osman, 32, says Halal chicken vendor Mohamed Hanafi threatened to kill him. The trouble started in August, when Osman, who'd previously peddled hot dogs, started selling chicken. When he refused to stop, Hanafi moved his cart right up in Osman's face, where he started selling chicken for half what Osman was charging. The tension finally boiled over Wednesday, when a Hanafi employee, Farajat Yehia, allegedly slashed Osman across the arm with a butcher knife. That employee and Hanafi's business partner were charged with assault, menacing and criminal possession of a weapon. But Hanafi tells the Post that Osman used to work for him and signed an agreement that he would never run a chicken cart. He also says Osman cut himself. Osman, who was treated at the scene, insists he signed the agreement under duress. He's vowed to return to his spot today and keep fucking with that chicken guy.