Ok, that's not some kind of phrase meaning, "lay down your weapons." Nor is it a Bree Yark-esque "we surrender" (of course, if you actually know the language, Bree Yark does not actually mean "we surrender"). No, moosh, peace means "Movie, Please" in Jonathanese, and usually that "movie" is something Baby Einstein has produced, preferably "Baby Neptune" (properly called "Water" in Jonathanese.
Below is a short tutorial in Jonathanese.
B a a a a a=the sound a sheep makes
Baby (alt. Beebee)=Baby, or the big book of children's stories including Baby Says
Bobble bobble=the sound a turkey makes (gobble gobble)
DeeDee=Blanket (it also seems to mean the tassles on the edges of his blanket -- today he called my hat DeeDee, too, and it has the same tassles).
Mommy (the pronounciation is more like Mahmeee)=Mommy
Mooo=the sound a cow makes
Nanny=banana, Grandma (I wonder if he thinks his grandma C is actually named Banana?)
Tacktorrr (alt. Tacktow)=Tractor
Tat=CatWater=Water (the kid loves water!), but it can mean anything that Mommy & Daddy are drinking, including Kool-Aid.