By reduced I mean the Union conquers Virginia, Tenessee, and Arkansas, but the rest of the CSA manages to hold on until a ceasefire is called in 1865, with the assassination of Lincoln and Seward by a crazed woman for the death of her 3 sons in the war (still hazy on where they were, Ill come up with it later).
By that point in 1865 the CSA had begun recruiting black soldiers in larger numbers and managed to hold the line, making the front line relatively stable for about 6 months. Numerous assaults by the Union forces had failed and the severity of plundering and raping of former Confederate civilians by the north has lead to a large amount of resistance in the occupied states, with outbursts occurring every so often, only to be brutally snuffed out.
After the assassination, which was done by a New York woman, the northern public begins to turn against the war effort, causing the ceasefire. While heavily insulting to the South, the Confederacy is forced to give up the 3 states, with the Union arguing to much has been shed for them. Talks of plebiscite are brought up, but nothing set in stone. By 1866 talks break down, and the USA and CSA uneasily share the continent.
How would this effect the former Confederate States, as surely the "reconstruction" of them will be far more brutal than OTL. Would there be issues of future revolutions in order to join the Confederacy?
EDIT: There are other PODs which allow for a more successful northern campaigns, while others that rebuff Union attacks in the south. For the sake of the scenario, please just assume the south does better holding the south coast while the US does a bit better in the north.