Hitler never wanted to capitulate. It was victory or death. If they were going to be victorious or die in the fight, why would they care about a potential backlash from the international community?
I go into details of the cover-up of the Holocaust in my answer here. The long and the short of it was there were both immediate and long-term reasons for covering up the mass murder.
There is also one other rationale not mentioned in the linked answer: extermination was never a complete process. Although the mass murder of Jews peaked through 1942 through 1943, there were still sizable numbers of Jews in Hungary, Italy, and Western Europe. The deportation of Jews in Hungary, for example, took place in 1944. Announcing extermination before it was complete would have been counterproductive.
In response to a deleted comment in this thread: the thesis that the Third Reich was a narrow clique ruling over a majority of Germans through terror and propaganda is not supported by scholarship of this period. The Third Reich did use terror, but it was highly selective and capricious in its use of it. By the same token, the dictatorship had more than just superficial support among German populace.