There is no way for Greater Xavax the realm to bounce back unless the north suddenly and immediately shows an ability to strategize and work together effectively with Xavax and each other.
There are ways for THE Xavax to bounce back and remain relevant, ie its group of nobles.
Making peace at this point would mean they would be stuck in Xavax RPing about Phoenixes and stuff and I think everyone would rather they go on fighting. Well I'd like to think so anyway.