That is an interesting part of the story in my opinion. I wonder what will happen after that.

My girlfriend and I actually had a discussion about this last night, and this is what we concluded with:

Despite appearing weak by agreeing to stop worship of one of the divines, the Empire is simply on the verge of collapse as opposed to in the middle of falling apart.
Based on a few random NPCs (like the guy who the dark elves like in Windhelm) the "Great War" was horrible with both sides suffering many casualties. By signing the peace treaty, the casualties stop. The Thalmor are now (mostly peacefully) interacting with the residents of Skyrim. Over time, they may come to realize living in peaceful coexistence is much better than chancing utter annihilation. Or, at least the Empire will have time to prepare new troops (Since the Empire consists of multiple races and countries, I would imagine they would be able to accrue more troops quickly... but I don't really know)

While the Stormcloaks seem to have pretty righteous reasons to fight against the Empire and revolt (Revolutionary War style), it's extremely short sighted. If they are successful, Skyrim loses support of the Empire. As spread out as Skyrim is, plus accounting for casualties in the revolution, Thalmor could pretty much storm in and conquer the province and the Skyrim...ians? would be rather helpless. Even if they decide not to attack at all, the Empire brings a lot of trade up to Skyrim; without the Empire, who knows if the economy would be able to hold.

On the Empire side, they would lose the only benefit of the treaty (preparation time) by having to send more soldiers to fight with the Stormcloaks. Thus, the Thalmor would most likely go in for the kill.

In summary, Ulfric Stormcloak needs to svck it up and help the Empire rebuild so they can fight the real enemy and stop whining about what the Empire did to save everyone.
Talos ascended to God-hood once. I'm sure he could do it again.

And that's my two cents!

Ah, it's pretty easy to come to this conclusion if you don't know much about the politics of Tamriel or its history. The Empire currently consists of High Rock, Cyrodiil, and half of skyrim. A little bit of morrowind too. The redguards seceded at the end of the great war and drove the thalmor out of hammerfell. They're probably not open to relations with the empire anytime soon. High Rock has always been a bit power hungry, kept in check because the empire has Skyrim to threaten them with. If Skyrim secedes, High Rock will likely follow. You can overhear conversation from Ulfric seeking to ally with them. The stormcloaks really don't plan to go it alone. "Skyrim will lead the rest of Tamriel against the Thalmor" is one of the last speeches Ulfric makes.

As for the last one. The East Empire Company still operates in Windhelm despite it being the capitol of the stormcloaks. The local guards all seem rather pleased when you help them out too.

Some good books to help out if you want a clearer event of what happened on the great war are the following
http://www.imperial-library.info/content/rising-threat
http://www.imperial-library.info/content/great-war

As in local guards it means every guard in skyrim says the breton cheeze line

The thing is, Ulfric isn't that powerful. His rebellion is in a stalemate against a portion of the Imperial Legions. While that portion might be large, its safe to say the Empire does not have all its swords in Skyrim because they have to safeguard their other provinces. Now, we can assume as of yet that the Imperial Legion isn't strong enough to re-challenge the Thalmor, and if they aren't strong enough, Ulfric's forces aren't.

They had to bring in more forces to stalemate the rebellion. Until Tullius and his troops got there, the stormcloaks were very successful against the imperials stationed in Skyrim. Tullius had to start recruiting locally to keep the fight a stalemate.

The empires forces are currently controlled by 1 person who doesn't understand how to lead effectively(Or thinks the situation's hopeless). That's the biggest problem. Besides the token force in high rock and the forces in skyrim(Many of which are being recruited locally now), the rest are stationed at the border of the dominion territories.

Tullius for emperor 2012

Empire? Dead? No. The Empire, more than obviously plans to overthrow the thalmor and defeat them. sadly, unseen by loyal stormcloak supporters, if the stormcloaks and empire joined sides against the thalmor, they would win. they would not only win, but they would kick some major a**. however, anyone who has played through the main quest knows that this is...well. i cant post spoilers here. on a note regarding the conversation youve brought up, i say long live the empire. the filthy thalmor wont have skyrim either. if we could i would march to summerset isle and kill the entire dominion myself. getting even more so on topic, the Empire shall forever be in TES. its just a fact of life.

True. And Tullius has a long history of being sent to "solve problems that need fixing" according to what he tells you.

The empire is not dead at all, its still very much alive and its being held together by the Thalmor. That does not mean its dead at all just struggling, just because an empire gets weak does not automatically mean its dying. Sure the Septim bloodline is dead because there is not more heirs to the throne, but we will need a new powerful leader to reunite all the provinces end the civil war for good and overthrow their Thalmor leaders, all of this will be great to explore in a future expansion.

their is no reason to let Aldmeri Dominion imprision anyone in the empire

That's what you call them dragging people out of their homes and torturing them? Did you come across the massacre at a Talos shrine outside Helgen? The only reason it ended that way is that the Thalmor agent wasn't given soldiers to accompany him (as a note on the body says). Otherwise the Talos worshippers would have been dragged off on the hush and probably never heard from again. That's... one kind of peace, I guess.

They consist of Cyrodiil, whatever's left of a devastated Morrowind, maybe High Rock and maybe Skyrim. And they've had 30 years to get their act together.

Or Skyrim could end up just like Hammerfell, used as a bargaining chip to save Cyrodiil. The empire can't protect its provinces anymore. It needs to go away and Cyrodiil needs to learn how to build alliances without having their boot on everyone's neck.

WOW!!!!!! if this is true (which unfortunately I doubt) It would be soooo awesome TIBER SEPTIM TO THE RESCUE!!!!!

I concur a second great war that destroys the Thalmor and restores the power man over mer and Talos to be recognized as a god once more.

I for one think the empire will be rebuilt under a new dynasty of emperors, but we need a strong capable king to get the empire back on strong footing. Then we will need a weapon to usr against the Dominion something of significant power.

@Celan
The entire land of Morrowind is not devastated anymore and Vvardenfell still exist even after the explosion of Red Mountain, the Dunmer have had time to rebuild and some Dunmer have even went back to their native Morrowind.

GUYS GUYS GUYS YOU WON'T BELIEVE THIS BUT

This isn't the septim dynasty, it isn't the third empire and it isn't the same thing.

Sure the Septims were great but they had a looooooooot of problems if you read their history, tons of family conflicts, corruption, kidnappings, and seriously other stuff making the family look worse. Also Ulfric won't be doing anything towards the Thalmor, why? Because he is something called a Tyrant and he won't be able to have enough loyalty among his ranks when he starts oppressing the common folk and drive Skyrim's economy down further, not to mention he is the whole reason that Talos worship started to become heavily enforced, before the civil war and this has been stated in game every Nord family had their own little shrine of Talos and still paid the god respect.

Another thing stop acting like the Talos ban is permanent, its not. Once the empire launches a counter attack against the Thalmor they'll most likely lift the ban also Celan, no thats not going to happen. The empire didn't want to give up Hammerfell and they hated that they did but they needed time to rebuild itself from the massacre the Dominion caused, Skyrim won't be a bargaining chip and the empire still very much loves the provinces, also Cyrodiil actually still has a lot of alliances among the orcs and bretons, seeing how the Legion are the only reason the Orsimer aren't a dead race and that the High rock city states have always been Empire supporters, and there are still more Empire supporters in Skyrim then there are Stormcloak. When the Empire launches their attack on the Thalmor I suspect that the Redguards will instantly help them to get rid of the Dominion. Also Morrowind is neutral like Black Marsh, they can't afford to fight a large war as they are still rebuilding their broken home and society which for all we know could actually have happened, especially since Vvardenfell and the mainland coastline should be returning to normal, if not better due to Volcanic ash after a eruption being very fertile.

The empire is not dead at all, weakened? Yes very much so but not dead.

Yes that's why the brotherhood must kill Titus Mede II so that way there is the opportunity for someone new and more powerful to take charge. Also as far as a weapon against them I think it may be possible to perhaps create a second nundium or something along those lines (or you know Talos could help a bit being the man god of the empire and whatnot).

That's part of the problem. The Medes are decent enough but they can't keep it together.

Irony alert.

Awww, a love story. lol No, I don't buy this. Cyrodiil is flailing to save itself and when push comes to shove, that's what they'll do. Mede doesn't have enough political support at home to do anything else. Whoever comes after him will likely be even weaker.

I smell someone with little faith for the empire kind of like the... THALMOR I do agree though cyrodiil is too corrupt thus a new empire should begin with the dovahkiin and all of skyrim leading it not a tyrant like Ulfric or a spineless wuss like Mede.

Indeed, it is a part of the problem and that is a lovely story. As for political support that also goes for Ulfric: He have to be hostile to the Thalmor because his people and army demand it.

That is why I am thinking we will see a new emperor real soon one to rebuild a broken world. There could be some divine intervention like with Akatosh against Dagon but he bad to physically manifest in the world before Akatosh came. So I wonder if like you say Talos were to intervene, will the Thalmor be close to their goal of shattering the Mundas and exactly how close to that goal will they be exactly, thats a thought to raise an eyebrow.

It truly is if the Thalmor do start to come close (and I think just somehow that will coincide with the next great war) I believe the aedra would intervene but also maybe the daedra will intervene and oppose the divines and the empire just a thought.

Please. Just because you don't love the empire doesn't mean you want another, even more oppressive empire to take their place. I don't want any empire at all, rather I would like to see an alliance of free nations. It won't be easy or pretty but its time has come. The empire served its purpose and now it needs to go away.

Now I smell a hippy Elder Scrolls wouldn't be very interesting without conflict.

I don't think that alliance wi\ould be without conflict to be honest. I'd give it a few centuries at best before they started to kill each other once more.