State capacity crucially affects the outset, duration and level of violence in civil wars. The literature uses indirect measures (such as GDP or the capacity to tax) to proxy for a state's ability to fight or prevent civil conflict. In this paper, we employ a new measure of state capacity and test its effect on the (de)escalation of civil violence. We assemble unique data for more than 120 countries, yearly 1989-2010, to estimate the effect of the composition of the military capital stock (e.g. number of attack helicopters vis-à-vis tanks) on the onset, escalation and dynamics of civil conflict. Our main finding is that countries whose militaries favor attack helicopters over ground-based weapons are associated with shorter civil wars and prolonged peace. Yet, this way of promoting the de-escalation of civil conflict comes at a price. Taking the spatial distribution of conflict events into account, we find that rebels shift fighting towards urban areas after they competed with an army that favors a strong air force. Consequently, the country experiences a higher level of indiscriminate violence against civilians since rebels become harder to target in populated areas. Hence, governments face a trade-off between faster de-escalation and maintaining a low amount of civilian casualties.