Road traffic injuries are a leading cause of injury-related death and disability in children in Israel. The use of safety performance indicators (SPIs) is common today for benchmarking road safety performance and monitoring of trends. This study aimed to develop a set of indicators which would assist in diagnosis and promotion of child road safety in urban communities. A wide set of basic indicators was defined with an interdisciplinary team of experts. A pilot study was undertaken in four municipalities, in which the data for five safety domains: injury, background characteristics, road user behaviors, attitudes, policy and management—were collected and basic SPIs were estimated. To combine the basic indicators into a composite index, for each domain, a statistical model based on common Factor Analysis was applied. The Factor Analysis demonstrated a reasonable way of aggregating the indicators’ meaning, for each domain considered, and produced the tools for municipalities’ comparison. It was concluded that the child road safety indicators and composite indices developed are applicable for measuring and monitoring of municipalities’ road safety level and practices. National authorities may use the tools developed to compare urban communities at a regional or country level.