Yes, DC, to war. But given Vito's statesmanship and practical nature, it might not have been a war aimed at the entire Tattaglia family:
Certainly Vito would need Sollozzo dead. In the grand scheme of things, he was (as Hyman Roth later said of Frankie) "small potatoes." I'm guessing (and this is a guess) that Vito'd approach Tattaglia in somewhat the same way Michael talked about Fredo to Tom after the Havana revelation: Vito'd say that he knew Sollozzo had misled Tattaglia, that Tattaglia hadn't intended to jeopardize the peace that the Five Families had enjoyed for more than a decade, etc. He'd then demand concessions and/or tribute from Tattaglia as compensation: No more drug deals, some rackets conceded to the Corleones, etc.

But I don't see Vito trying to wipe out the Tattaglias or take over the Tattaglia family. He'd realize that even though he could easily outfight Tattaglia, a war would be costly on both sides. And since the Tattaglias' main business was prostitution, he wouldn't want to become the city's biggest pimp. I think Vito would see the real value of letting Tattaglia pay compensation and live would be to send messages to the other Dons: I'm still Number One here; I'm protecting all of us from a destructive war--and, no more drugs!