Peebending is the waterbending of your (or another's) wee-wee. Hama and all the other imprisoned waterbenders were stupid for not simply peeing on the floors of their cages and bending the pee to kill the guards and escape. Bloodbending is all evil and sith-like, but peebending would have been way easier.

Peebending is also used in Freeze Your Nation, which was originally Freeze Urination.