Be honest! If you are fearful that your current employer may be contacted and in turn cause some hostility if you are not extended a job offer by the interviewing party - let them know of your concerns. Tell them you are indeed employed and are fearful of retaliation if your current employer were to find out you were actively seeking employment elsewhere. I was a hiring manager for years, and I rarely ever called a current employer for a reference if the person I was interviewing expressed concerns, assuming they had a long enough work history for me to call and inquire elsewhere. In a perfect world employers would see it for what it is - a chance at bettering your situation, though some almost always get a bug up their rear when an employee is looking for work elsewhere.
In some areas it is grounds for dismissal if you have left a previous employer off your work history (assuming the application dictates "please least all occupations for the last X amount of years). Seems silly but I have had to terminate a few employees for omitting information on an application. I think perhaps it is considered a way to gauge honesty, and if your are not honest on an application then they think you will not be in your position (speculation of course, I never understood this practice as we have all worked places we would rather forget). It is important to get someone to sign off/initial the "current employer" section if you leave it blank or even put "prefer to discuss in person" on your application or resume. This way even though you failed to list it, if a job offer is extended then you have proof that the omission of the information was agreed upon during your interview.