Should the Dragonborn not have sided with the Imperials or the Stormcloaks in the Civil War yet, Jarl Balgruuf the Greater will demand some form of temporary truce between the warring factions before agreeing to help capture a dragon using his Dragonsreach during The Fallen quest.
The conditions of the truce the Dragonborn negotiates during this quest have (far-reaching) implications for the political structure of Skyrim.
Talk to Arngeir
To get the two factions to talk to each other, it is suggested to get the Greybeards involved, since they are respected by both sides. Their human representative Arngeir at High Hrothgar will not be thrilled, but since their spiritual master Paarthurnax supports the Dragonborn, so will they. After, talk to Arngeir to begin the quest
Talk to General Tullius
Not yet having joined the Imperials, the dialogue will at first steer towards joining them, but persisting to talk to General Tullius will bring up the topic of the peace conference. The quickest way to convince him is to use Persuasion. He will then travel to High Hrothgar.
Talk to Ulfric Stormcloak
Not yet having joined the Stormcloaks either, the dialogue will at first steer towards joining them, but persisting to talk to Ulfric Stormcloak will bring up the topic of the peace conference. Again the quickest way to convince him is to use Persuasion. He will then travel to High Hrothgar.
Talk to Arngeir
Take your seat
Before the conference begins, the Dragonborn has the opportunity to talk to all the attendees.
Negotiate a truce
Both sides will present their case, and suggest what they should get out of the temporary truce. It depends on what side the Dragonborn has joined at this point in the game, or stayed neutral.
The goal is to balance the demands of both sides, e.g. a neutral Dragonborn may have let Elenwen stay at the conference table, so that the Stormcloaks demand Markarth (no choice) and this will need to be balanced e.g. against Riften for the Empire, but that will not be enough for the Stormcloaks so they also get Falkreath.
- The choices of the Dragonborn obviously change who is in charge of the various holds in question, replacing the Jarls and their stewards for those of the new faction. It is interesting to visit the main cities and talk to the new Jarls, to see what they have to say.
- Even though the faction in charge of the hold may change, also swapping out the guards, the citizens do not really take notice of this.