Peace-up means "peace". The "up" part is used because "peace-up" is usually followed by a city that's "down".
Peace-up, A-town down! - Usher from "YEAH!"
Peace-up, C-town down! - My homies
Peace-up, B-town down! - Jay-Z
Peace-up, C-town down! - My homies
Peace-up, B-town down! - Jay-Z
by M to tha izzle September 20, 2004