Sean McMeekin in Stalin's War made the following interesting point about Roosevelt's inexplicable determination to demand unconditional surrender from the Germans in 1943 even when Stalin himself was willing to discuss terms:
They may even have missed a chance to end the European war in 1943, saving millions of lives—beginning with the Jews already or soon to be sent to Nazi death camps—and Europe’s cities from burning. Unconditional surrender gave German soldiers white-hot motivation to fight harder, as American officers grumbled. Major General Ira C. Eaker, commander of the US Eighth Air Force, recalled, “Everybody I knew at the time when they heard [of unconditional surrender] said: ‘How stupid can you be?’ All the soldiers and airmen who were fighting this war wanted the Germans to quit tomorrow.” General Albert Wedemeyer, who accompanied General Marshall to Casablanca, informed Marshall that “my ‘off the cuff’ reaction to unconditional surrender [is] that we, the Allies, would be playing right into the hands of Hitler and his henchmen. We would be compelling the German People to remain with Hitler supporting him and go right down with him to the very end.” Wedemeyer, who had served as liaison officer in Germany before the war, told Marshall that “there were many people in Germany—more than we were permitted to realize because of anti-German as distinct from anti-Nazi propaganda—who wanted to get rid of Hitler. Our demand for unconditional surrender would weld all of the Germans together.”
[...]
Still, the propagation of Roosevelt’s unconditional surrender doctrine in late January 1943, apparently in an utterly futile effort to appease Stalin, did not help. It was a slap in the face to Canaris, the mastermind of anti-Hitler plotting in Germany. So stunned was Canaris by Roosevelt’s announcement that he traveled to Istanbul at the end of January to meet with the US naval attaché in Turkey, the former governor of Pennsylvania George H. Earle, at the time Roosevelt’s all-purpose emissary on Balkan affairs. If Roosevelt would recant on unconditional surrender, Canaris promised Earle, a post-Hitler German government would seek an armistice with the Western Allies to allow the Wehrmacht to concentrate on the Soviet war. Earle, hopeful of getting Roosevelt to at least reconsider unconditional surrender, if not actively pursue a separate peace with a post-Hitler Germany, duly reported Canaris’s proposals to the president. Roosevelt was not interested. He ordered Earle to cut off all further contact with Canaris.
Despite the firm rebuff from Roosevelt, Canaris did not give up. All through spring 1943, the head of German intelligence dispatched emissaries to neutral capitals in Spain, Switzerland, and Sweden to open talks with British and American diplomats. Both the head of the British Secret Intelligence Service (MI6), Stewart Menzies, and the head of the American Office of Strategic Services (OSS, forerunner of the CIA), Roosevelt’s trusted troubleshooter Wild Bill Donovan, sent word to Canaris that they were willing to meet with him in Spain. In June, Canaris sent Count Helmuth von Moltke, scion of the legendary clan of Prussian generals, to Istanbul to meet with Donovan and Earle. Canaris and Moltke prepared a memorandum for Donovan, bearing the letterhead of the German embassy in Turkey, that included a promise that German military commanders would not resist an Allied invasion of France, and German acceptance of a US-British occupation of Germany “on the largest possible scale… eastward to an unbroken line from Tilsit to Lemberg”—that is, including German-occupied Poland—to counter the “overpowering threat from the East.” To establish his bona fides with Washington and London, Canaris leaked genuine German war plans to the OSS chief in Switzerland, future CIA director Allen Dulles. That these plans were authentic was confirmed by British and American intelligence officers who, having broken many Nazi codes, were themselves reading similar traffic. iii Dulles reported breathlessly to Washington that “whole streets in Germany were being plastered at night with signs reading ‘Down with Hitler and Stop This War!’”
Roosevelt was having none of it. In a terse wire to Istanbul, the president ruled out any deal with “these East German Junkers.” So angry was Roosevelt that he interrupted urgent business at the T RIDENT conference in Washington, DC, in the last week of May 1943—the conference where US-British plans for invading Europe were hashed out—to ask Churchill whether they might issue a statement affirming that, as Roosevelt’s speechwriter Robert Sherwood recalled, “the unconditional surrender formula meant that the United Nations would never negotiate an armistice with the Nazi Government, the German high command, or any other organization or group or individual in Germany.” Although Churchill persuaded the president that such an addendum to unconditional surrender was superfluous, Roosevelt issued a standing presidential order to the US Office of War Information’s censors “forbidding all mention of any German resistance,” an order in force until the end of the war.
There is no way of knowing for sure why Roosevelt felt so strongly about unconditional surrender that he ruled out negotiation with Canaris and the Abwehr, the German high command, or “any other organization or group or individual in Germany.” Not even Stalin, the man Roosevelt seemed so desperate to impress with his toughness, would go anywhere near this far. In fact, in April 1943, even as the US president was loudly advertising his intransigence against negotiating with Germans and courting Stalin by endorsing his Katyn line, Soviet diplomats, including Stalin’s trusted NKVD troubleshooter Boris Yartsev—the man sent to Helsinki in 1938 to demand Soviet basing rights in Finland—were discussing a separate peace with German negotiators in Stockholm. These talks were serious enough that they were resumed on June 17, just days before the Germans planned to launch their summer offensive. According to Edgar Klaus, the Abwehr agent who met Yartsev, the initiative came from the Soviet side, not the German. “I guarantee you,” Klaus reported to Canaris, “that if Germany agrees to the 1939 frontiers [i.e., the Molotov-Ribbentrop borders] you can have peace in a week.” Even as Roosevelt was ruling out discussions with the anti-Hitler resistance in Germany, Stalin was approaching Hitler for an armistice, however tenuously. Significantly, it was Hitler who intervened with Canaris to cut off peace talks in Sweden—not Stalin.
I think it would be interesting to speculate how the world might have turned out if the US had not joined World War II. Tentatively, it seems given that Britain was gathering forces from across the empire, ready to liberate both Europe and Asia, and further that both Stalin and Churchill was more willing to accept a peace settlement with Germany rather than demand unconditional surrender and march into Berlin as Roosevelt wanted, speculatively we might infer the following:
(1) The war would not be as devastating and costly if it could truly be ended in 1943 and Germany returned to her traditional frontiers.
(2) Instead of a Postwar Order constituted by the Atlantic Charter, the British Empire can claim credit for liberating Europe and saving Western civilisation from Nazi Germany, its honour and prestige would be saved, and the empire might survive another hundred years.
(3) Germany wouldn't be as devastated and humiliated. It will just be another inter-European war where the great powers fought and then made peace, not an ideological crusade and complete overhaul of one's political system and entire civilisational outlook inside out.
One could always dream.
Ah well, the Postwar Order is unravelling itself as we speak anyway.