I'm working on a number of different inter-connected updates to diplomacy, and I've just pushed my current working draft (r37620) out to the test servers.
For starters, there are now a number of different causes that may motivate a declaration of war. All of these causes take faction attitude into account, so AIs should be far less likely to suddenly start a war with someone they have good relations with. Conversely, low reputation now has a much higher chance of translating into open hostilities.
AI's are also far more likely to stop fighting wars that aren't going terribly well for them -- which I'm hoping will have secondary benefits for mid/late game balance, as it should now be much less likely that AIs will exhaust themselves fighting unproductive wars. (Though the "sue for peace" events themselves still need work to better balance the terms of peace treaties.)
And I've also made a number of changes to the way that alliances factor into war/peace behaviors.
There are still many bigger and smaller TODOs on my list for overhauling diplomacy-- but, some feedback on how the current system is playing would be helpful. So, if anyone would like to checkout the latest dev build, play through a game, and let me know what feels like it's working, and what's feeling off, I'd appreciate it.