What are blood or conflict diamonds?

A conflict diamond is a stone that is mined by people forced into this labour by threat of death, then the stone is traded for money to fund terror, mayhem on humans, civil war and so forth.

Another Answer

Conflict diamonds are diamonds that are illegally mined in Africa using modern day slave labor. They are then sold on the black market for a lower price than certified diamonds. Usually they do not make it into large diamond brokers, however the system is not perfect and sometimes larger jewelry chains will unknowingly purchase these stones.

Conflict diamonds get their name from the fact that the warring tribes in charge of the mining operations usually use the money they get to purchase weapons and to fuel their "conflicts".