Largely a combination of the factors that you have already noted. Britain's brutality in Ireland was an acute embarrassment in London after four years spent fighting, and demonizing, the Hun on the Western Front. The IRA's military campaign undermined Britain's claims to be merely policing law and order, and also gave the Republic a de jure claim to authority. Moreover, Britain had partitioned Ireland in 1920, so the division between a Unionist north and a Republican south was already a fait accompli. In 1921 negotiations Britain raised the prospect of ending the partition, and Ireland accepted dominion-status as the Irish Free State. Foreign pressure did not have too much to do with it, I think. De Valera spent some time touring the United States to drum up support, but the American government was understandably loath to turn on its wartime ally and gave him the cold shoulder.

Source: Charles Townshend, The Republic: The Fight for Irish Independence, 1912-1923

My mistake. It was an attempt to resolve the pre-war Home Rule crisis.

The Home Rule crisis was largely a British invention or had a basis in British politics. It was brought about by the English Conservative Party which had opposed Home Rule for Ireland in the 1880s. Randolph Churchill had travelled to Belfast and made promises to the Unionists that they would have the backing of the Conservative party if they resisted Home Rule.

In November 1910 the Unionist organized to set up a paramilitiary army as part of the resistance. They then formed the Ulster Volunteer Force and imported guns illegally via the Larne gun-running in 1913. When they threatened to march on Dublin the British army at the Curragh was alerted to this fact by the Liberal PM, Asquith. But they informed the PM that they would not march against the Unionists and in fact the officer class would resign. General Haig warned the War Office to expect wholesale resignations unless a pledge was given that the Army would not be used against the Ulster Volunteers. The British army declared itself to be the "kings Men' and as such would not confront Unionists. This is known as the Curragh Mutiny.

The Liberal government lost its nerve and Ulster Unionists were not disarmed. In the face of this the Nationalists who stood for Home Rule then armed. They formed the Irish Volunteers who would eventually become the IRA.

This all eventually led to the 1916 Rising against British Rule which failed but was the basis for Irish nationalism to come of age. In the 1918 general election Sinn Fein won 73 out of a possible 103 seats and declared Irish Independence for the whole island. Sinn Fein then established a government in Dublin [which they named Dáil Éireann] for the whole country. The British declared this government to be illegal and sent in British troops to break it up. Churchill augmented the troops with auxiliaries known as Black and Tans who wrecked havoc on the civilian population. The IRA led by Michael Collins were officially recognised by Dáil Éireann as the official army of the independent Ireland.

Meanwhile the British parliament passed the Home Rule bill in 1920 with the Government of Ireland Act but partitioned the island - this was not a new policy but had been part of the Home Rule bill of 1912/14. The main reason why the 1916 Rising took place was to protest the partition of the island by Home Rule which they declared to be a dead document.

By 1921 the British were weary of the fight and asked the Irish for a truce. Michael Collins and other nationalists signed the Treaty in December 1921 but had to accept the partition of the island.

Source: A Nation and not a Rabble: The Irish Revolution 1913-23 by Diarmaid Ferriter