Considering that Hitler had demonstrated very thoroughly that he could not be trusted to hold up his end of any agreement, why would any of the European combatants even show up for negotiations?
For PR and to embarrass the Germans by making public their inevitably over-inflated demands and pompous attitudes. Nothing like a good PR stunt to lift up sagging moral. Simply requesting that such a meeting be attended by top level Nazi's and that it be held in a "neutral" location that is suitably pro-allied to ensure that its a allied run dog and pony show by allied run media and you'll get the PR win for sure.
Just have the initial conditions for negotiation commencements be so outrageous to any sane Nazi's that it in itself will be a sign of good faith.
Imagine that the negotiation conditions be that the allies be allowed to fly one long range bomber to Berlin and pick up the Axis delegation and fly them to the USS SomethingAwesomeAndSuited parked in the UK from where they'll be flown to NY where they will be "suitably entertained" for the duration of the negotiations and you'll see if the Axis are actually serious by who they'll send. Anyone but top level Nazi representatives (not counting Hitler or Mussolini personally but 2nd in command or around that level of responsibility).
Also, the US was firmly in the Allied camp by the time of the Pearl Harbor attack, the USN and KM were in a defacto state of war and the US was sending tons of materiel to the Allies, the only thing lacking was an active role in fighting the Germans.
Exactly, its the last shot for one final round of diplomacy before everyone knows that it will be a Ground war in Europe that costs the allies (including USSR) millions, and the Axis dozens of millions in dead before the war is over. Its that last shot before all hell breaks lose. They might be willing to listen to an honest shot, but they have to be damn sure its honest.
EDIT: Also, stabbing the Japanese in the back would have other rather unfortunate side effects.
Yes but less unfortunate than facing the US+Commonwealth+USSR after the failure of Barb has.
How would the other members of the Axis react?
Irrelevant after the failure of Barbarossa. After it failed to topple the USSR in a single year as predicted, everyone except the most fanatically suicidal world conquest style Nazi's knew that this was it. They were literally begging for peace behind the scenes starting from early 1942. Which would be around this time. I doubt even Rommel believed in victory after the first defeats of 1941 fall. Least of all not after they werent even able to take Moscow, which Napoleon did and still lost. Most of them knew by this state, especially after the US entry into the war that this was it.
You know like the Italians or even the Romanians who the Germans are getting the lion's share of their oil from, and simply deciding to occupy all of the axis members that choose to opt out of the alliance is hardly the most practical of solutions as not only are they now losing everything said axis members were providing but now have to divert resources to occupy said
nations.
Everyone but the most suicidal axis nations Would agree to a peace.
Only real Axis border corrections at this point would be:
Most axis gain parts of Yugoslavia.
Italy and Bulgaria gain parts of Greece.
Germany gains AL
Italy gains parts of Eqypt and Sudan that the British are willing to part with at this point, which would most likely be nothing at all except a short strip of desert in Italy-Eqypt border, but if the UK are feeling remarkably generous, they might part with a part of Sudan in exchange for better conditions elsewhere in negotiation process.
Poland loses Polish Corridor + A semi-"resonable" border correction in favor of Germany.
Finland gains minor parts of USSR to make its border more easily defensible, return of pre-war territory in full + return of war indemnities.
Neutrals gain:
Independence for Baltics.
NATO that starts in 1942 with most of OTL 1942 German military stock given over to NATO minors for free.
Guarantee for UN style common defense against all attempts by Germany for a military solution backed by UK and US and USSR and all of the former German military gear that is now in UK/US possession.
That's about it. In exchange, the allies gain:
UN oversight of German disarmament (this means de-facto but NOT de-jure occupation for several years).
Germany handing over most of her military gear, Other axis hand over as much as they want or don't want. Germany would be willing to throw them all under the bus if it means she gets to keep pre-war + above. So they will most likely co-operate.
A German Field Army (or two or three)battle hardened and determined to show their worth in an effort to maintain peace in their homeland which hinges on their professional and suitably bloody conduct against Japan.
Diplomatic dominance over most of Europe and the World that is now suitably afraid of German Resurgence but suitably guaranteed by the UN occupation that it wont happen to still join NATO.
The allies that lose in Europe would gain in the Far-East as the quick and effective collapse of the Japanese under such enormous pressure would result in wide swaths of former colonies that are now open for economic exploitation. Including "rebuilding contracts" in China after the Japanese are suitably evicted.
France would be the biggest loser, but after the collapse in 1940, no one really cares, since Versailles was generally seen as a France failure even at thi state in the war. In combination with some of the allies still feeling that while a German victory would be unlikely, it might be possible and as such this would be a tremendously good deal. France would be hard pressed to complain since they would have some internal politics to sort out with, especially with the Vichy / France in exile thing. UK would just breath easy that it got out of this one without trench warfare. The US population would be happy that it can return to peace, and the allied minors would just be glad to get their countries back and to have Germany occupied by the UN (the US, in effect.)
Short of that, Pre-War borders app
Worse, it could cause a massive chain reaction where the situation quickly spirals out of control and Germany is truly standing alone against all of Europe. The best option for Nazi Germany was to simply not ally with Japan in the first place.
It could, in fact its probably the most likely outcome, that it would result in a Germany VS the World. But strategic planning indicates to everyone even on AH that Germany is toast if it cant beat USSR in one year, this was obvious to the German staff at this point as well.
For many in Germany, it would be a question of "do we settle for a really good show and the next generation" or "Do we try to get everything now."
Its not impossible to think that Hitler might try to end it with one massive diplomatic coup that no one expect him to do, and that's to actually go for peace at this state and then just withdraw to Munich to continue painting.
We'd be reading "Hitler and the art of the deception in warfare " all the way to the 41st millennium if he pulled it off.
Not saying its likely, saying its possible but very difficult to do and like most of H mans stunts, not that impossible to fathom.