[quote=@Cyclone]I wonder what would happen if the elves discovered that it was the PRK that bombed their stuff, and if they didn't escalate the Tin conflict into a full on war.
[/quote]They would use this information to practically blackmail PRK since such action likely would hurt their relations with the other nations a lot.
PRK's ideologies clash with my nation and they're pretty much unpredictable.
This can give me the means to exert my influence over PRK a bit which could come quite handily in the future.

As for the escalation. Yllendthyr would do everything it could to avoid a war unless the odds swings to the elves' favor considerably.
If they can manage to get Avalia to participate in the war and if needed even force PRK then they might attempt this and can even do it while claiming moral high ground.
You actually have a better chance for peace if Yllendthyr doesn't realize PRK planned this whole incident.