1. After you have completed all of the Alliance Quests, a Messenger appears (usually at the front gate of Thjorgard) and informs you that war has broken out between Sturmford and Drangheim.

2. You then talk to each of the two Jarls in turn and tell them that you were the perpetrators of the events that caused the war and will get a treaty prepared by a third party (in this case Kira the Cold).

3. You go to Thronheim and see Kira and ask her to prepare the treaty to stop the war and she agrees. She tells you to come nack the "next day" nd pick it up. Actually you only have to wait 10 minutes then talk to her again and the treaty is ready.

4. You then revisit the two Jarls and inform them the the treaty is ready, they look at it and agree it is a good one, and then agree to sign it at the war council in Thronheim.

5. You then return to the Council in Kira's Palace and. as soon as you walk into the room, the war coucil cutscene starts.

I don't know what happned in your case, but if you didn't do it in that order maybe something went awry. Perhaps Bones knos of a work around for that.