And how about wars like USSR - Finnland? Will it be always required one country to be defeated (surrender) to negotiate peace? How will it look? Is the Soviets good will that will decide that only Karelia will be taken from them and not whole country occupied? Will they have nothing to say? It looks little weird... I thought that engine should solve as much as possible problems and I see that we need to go back to the events system (or decisions in this case: 'take Karelia')...
Or am I gettin something wron here?
I think the total war issue needs to be taken a look at a bit more. It should really be based on ideology and war exhaustion.
Japan and Germany might really have been exceptions rather than the rule because of their systems of government led to unreasonable exceptions on how the war would end.
Had Valkyrie succeeded and Hitler was assassinated and the NSDAP party ousted, there might have been a conditional surrender of Germany.
Had Germany successfully repelled D-Day, there might have been a settlement with the Soviets.
Either way... Perhaps this would be a moot point if the AI is smart enough to know when it is beaten and stops playing offensively and focus on holding on to their gains and delaying any more losses. (Yes Germany had a historical problem with this)
Rather than the AI's being suicidal and constantly attacking, there needs to be a point at which they know they are beat and are act accordingly.