People could not believe that such brutality may occur in the twentieth-century world. They expected that politics and diplomacy would not allow the genocide of an entire nation.
Detailed answer:
Elie Wiesel explains the denial of townspeople by their sincere disbelief that Moishe’s stories could be true. Denial for them is a form of abstraction from the terrible reality. They think that such acts of cruelty were impossible in the twentieth century. Townspeople listen to the news of the successes of the Red Army and count on their strength. They believe that Hitler is unable to eliminate the Jewish nation.
People rely on politics and diplomacy. Thus, the prospect of such brutality was completely unreal for them. They hear about the Nazis and their activities, but it “was all in the abstract”. When German troops enter Hungary with the permission of the government, people start worrying. Thus, the reason for the townspeople’s denial is their confidence in the protection of the government.
The twentieth century seems so civilized and humanistic to them. So, that they cannot believe in Hitler’s intention to eliminate an entire Jewish community. Neither do they think that Moishe’s stories may be true. People simply believe that “he had gone mad.” If such cruelty exists in the world, then there is a force capable of stopping it. Their belief in diplomacy, politics, and humanism betrays them, dooming them to long-suffering.