What evidence do you have Federation not caving in to any Klingon or Romulan demand would lead to a bloody war???This means the cardassians don't expect the Federation to fight a long, bloody war for them, federation citizens to die just so that cardasssian teritory doesn't go to klingons or romulans.
If your policy is "let them think so", you're not going to get very far in forging any kind of lasting peace in the long run. Using military or economic power can work in a short run, but turning the population against you and giving them reasons to hate and mistrust you is likely to bite you back in the ass sooner or later.If the cardassians think "about the Federation as another enemy empire bent on expansion, as hostile to Cardassia as the Klingons or Romulans, only more hypocritical about its motives and methods" because the Federation doesn't send its citizens to death, doesn't provoke the maximum possible amount of death and suffering for the sake of cardassians who just tried to DESTROY THE FEDERATION, let them think so. Contrary to what you think, it doesn't make the cardassians right - NOT EVEN CLOSE.
It's astounding how different standards you have for the Klignons. Apparently, the Federation has to go out of its way to appease them to the point of letting them annex territories with the population that they have a long-standing animosity for and which they'll likely to treat only slightly better than the Jem'Hadar did after they were ordered to slaughtered them (as for Klingon humanitarianism... Martok's reaction in What You Leave Behind said it all, and Martok is a decent and honorable guy by Klingon warrior standards. If you think that any Cardassians living in Klingon territories would not suffer atrocious fate, you're kidding yourself)... and you're assuming that, if the Klingons do not get everything they want, they'll immediately start another long and bloody war with the Federation?! The Klingon Empire that has, according to you, become more 'honorable' and 'humanitarian'?

The way you're painting Federation's relationship with the Klingon Empire, it makes it seem like it's not peace or alliance, but that the Federation is at the mercy of the Klingons unless it gives in to every demand they might have.

edit: Here's an idea for the negotiation: if the Klingon Empire must have parts of Cardassian Union territory, then let them have a planet where the majority of the population is non-Cardassian, and one that Klingons don't have a beef with, and significantly different from Cardassians enough so that the Klingons wouldn't think of them as Cardassians. Giving Klingons any territory with Cardassian population living on it is just inviting trouble to happen.
Contrary to what you think, racism and condemnation of an entire race of beings for the actions of their leadership goes against the fundamental ideals of the Federation. If the Federation officials were to actually employ the reasoning: "Cardassia was our enemy and therefore Cardassians deserve to rot, why should we give a damn about any of them", then they would be extremely HYPOCRITICAL.If the cardassians think "about the Federation as another enemy empire bent on expansion, as hostile to Cardassia as the Klingons or Romulans, only more hypocritical about its motives and methods" because the Federation doesn't send its citizens to death, doesn't provoke the maximum possible amount of death and suffering for the sake of cardassians who just tried to DESTROY THE FEDERATION let them think so. Contrary to what you think, it doesn't make the cardassians right - NOT EVEN CLOSE.
They were also smart enough not to make any of their lead Federation characters/heroes abandon their ideals altogether. See the above mentioned scene in What You Leave Behind, in which Sisko and Ross (neither of them a morally perfect Starfleet officer by any stretch of the imagination) are deeply saddened and horrified by the death and destruction they see on Cardassia, rather than gloating over hundreds of millions of dead Cardassians like Martok does.About the Federation upholding its ideals - the DS9 scenarists (and, to a lesser extent, the TNG/etc ones) were inspired enough to NOT make the trekverse a morally perfect universe.
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