A long, long time ago I suggested that World War 2 could've been ended more quickly if the Allies hadn't insisted on unconditional surrender -- that the German military might have been more willing to topple Hitler if they knew they would be treated fairly by the Allies in a peace conference. (History, I think, shows that West Germany, at least, was treated more than fairly by the Allies.) This came up in the context of whether to negotiate with Iraqi insurgents.
Regardless of whether any of those ideas were good, this very interesting public opinion chart from Talking Points Memo shows that the American public clearly disagreed with the idea of a negotiated surrender of German forces. Even in late 1942, with a strong majority of Americans thought we were losing the war (more accurately: were not winning the war), only about 1/3 of Americans were willing to make peace with the German army, assuming Hitler had been removed from power. During the entire course of the war, public support for negotiated surrender of the German forces never broke 40%.
Whatever the merits of negotiated surrender then, and whatever you think of negotiated surrender now (and most of you thought I was somewhere between 'hopelessly naive' and 'dead wrong'), it appears that negotiated surrender was not a political choice for FDR.