True peace, let alone unification, wouldn't exactly make sense given the factions' histories. They have different governing systems, opposing philosophies and ways of treating the world, races that hate each other and would never want to share the same space (Would an Alliance human want to go to sleep at night with a Forsaken or an Orc around the corner? Or be okay with the Forsaken raising their dead in order to replenish their numbers?). It would take generations to truly clear the air between the factions. It doesn't take a war for there to be conflict between them.
Actually, I think the best bet would be to remove the game mechanical separation of the players into factions. As the current Horde situation proves, you can easily have strife within you own faction. By have players segregated like it is, you are forced to shoehorn the other side into conflicts where they don't belong and logically have no interest. The Horde and Alliance could easily still exist as factions, the same way the Argent Crusade and Cenarion Circle still exist even though any player can hang with them.
Players, on the other hand, are mercenaries. Willing to deliver books, torture natives and dig through poop for a few gold coins. They are also so frighteningly powerful anyone with a brain (aka quest givers) would turn a blind eye to race to keep the other side from getting their services.
If the Horde is having a civil war, the Alliance can just hang back and eat popcorn while they plan to attack the winner. Meanwhile, Bob the Human can sell his sword to Vol'jin's rebels because he is a mercenary and gold is gold, and Vol'jin doesn't want him working for Garrosh. No need to stupid diplomatic missions and forced inclusion, let things play out naturally.
War doesn't mean Horde v. Alliance, I think war with other things that isn't the opposite faction would be good. I mean, this war has been going on for a while, you have to wonder how many have died, how much smaller the populations are because of the war between the two. If the war between the two lessened, it would allow them to focus on bigger problems. For example, helping the gnomes clean up and retake Gnomeregan, getting the forsaken to either calm down or dealt with (no faction really approves of them, what with what they're doing), having each faction repair their cities and land (Blood elves with the other half of silvermoon and the ghostlands, humans and stormwind/the park, trolls can build a better city of sorts on their isle, night elves can repair any damages they received on their lands from the orcs, worgen can take back and repair Gilneas, among other things). It would give them more money to deal with repairing, building their economies, and doing things like helping the people in Westfall and Sentinel Hill. They could have time to build up defenses and prepare for the coming invasion of the legion that they know is coming, through people like Velen, Tyrande, Wrathion, etc.
That kind of thing, not to mention people who want to place a race on the other faction could - like the Tauren (they're peaceful) on the alliance or night elves (they're savage) (or the highbourne) or the many people who want to play blood elves on the alliance. Just my 2 cents.