If Rheinland negotiate for peace where it gives something up, like a planet or claims to Hudson was it? Its government will collapse in my eyes.
The Bundschuh according to the wiki, gained massive popularity with the population after the sterling effort it made in the Nomad War. Its unfortunate there aren't more Bundschuh players to take advantage of this, or push politics in-game. I've never seen one.
Military wise, both sides are grinding into a stalemate, I mean after all the fighting, what have the LN got to show for it? A captured warship. That's it, but correct me if I'm wrong.
Both economies are suffering, the military on both sides are tired, and any foray into their home systems is going to result in a massacre that Liberty doesn't want, whether they win or lose the battle.
Look up Operation Olympic from WWII, either one side develops a super weapon, or they come to terms.