Ishgardians were the instigators of the war, their ancestors betrayed their Dragon allies out of greed and murdered Ratatoskr while their leaders since conspired to keep the truth buried and spread lies about how the dragons attacked them when they discovered Coerthas. Even after truth was freed many refused to accept it and wanted to continue the war the only reason the peace ultimately succeeded was because said people were either killed or commit suicide in the aftermath of their riot. With the conspirators out of the way the only real obstacle was nidhogg's shade which may have served to boost the public's idea of making peace with the dragons (due to seeing their most hated enemy attempting to murder his own kind who was attempting to make peace)
That said, Isgaard was in the wrong, not the dragons. Nidhogg went insane however and his death was inevitable. He was willing to kill his own kind (including his brother and Niece; who was acting as a diplomat at the time) to complete his goals
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