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I am not sure that it is fair to say that the world was “in denial” about the Holocaust. I think it is fair to say that they were unaware of it at first, and then were skeptical. When it was proven, they were not in denial but simply did not believe that they could do anything about it.
At first, the world was unaware of the Holocaust because it was happening in German-occupied Europe. The Germans were not publicizing the Holocaust within their own country, let alone in ways that would be heard by foreigners. There were no foreign reporters allowed to see clear evidence of the operations. Therefore, there was no easy way for foreigners to hear of it.
The word got out due to information smuggled out by various parties. These were generally resistance figures, but there were also some Germans who made efforts to inform the world of what was going on. The Allied governments did not announce what was going on right away when these sources were heard from. They wanted to take the time to confirm the reports. This is not strange given how unthinkable the crimes being committed were. It would have been very hard to believe that an evil of that magnitude was being carried out.
However, by December of 1942, the Allies had accepted that they had proof of what was going on. They officially and publically denounced what the Germans were doing and promised to hold Germany responsible for what it was doing.
Therefore, I think it is fair to say that the world was in the dark at first because the Holocaust was happening behind German lines. Later, they were somewhat slow to acknowledge what was going on because it seemed to be beyond belief.
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