Playing in H/H I also managed to have vassals (max 2). High rep is a condition for most diplomatic activity but it's not enough. The target must be at war with other factions as well. I've noticed that as long as I am their only ennemy, most of the time they don't even accept a ceasefire (except if our relations are very good or higher).
So get them excommunicated, launch a crusade against them, most of their neighbors will dow them, alliances will be broken and so on. They should happily accept. I am not sure if besieging their capital helps but the first time I got a vassal I was besieging it's capital...
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