Please try to separate them and heal the wounded one. Fish are like all of us, beings capable of fear and suffering, and depend on us to do the right thing for them.
If you chose to euthanize, please don't flush! I believe the easiest, most humane, least messy, and cheapest way is to put a bowl of isopropyl alcohol in the freezer for a while. Then, with the least amount of stress, put the fish head first into the bowl. Its nearly instantaneous.
Or you can check out the various methods here, rated according to how humane each method is: Aquarius Aquaria - Exploring Fish Euthanasia