In this contribution, a variational framework for diffuse modeling of cracks in heterogeneous media is analyzed. A static order parameter smoothly bridges the discontinuity at material interfaces, while an evolving phase‐field captures the regularized crack. The key novelty is the combination of a strain energy split with a partial rank‐I relaxation in the vicinity of the diffuse interface. The former is necessary to account for physically meaningful crack kinematics like crack closure, the latter ensures the mechanical jump conditions throughout the diffuse region. The model is applied to crack propagation, where a significant influence on crack branching is observed, that underlines the necessity of a reasonable homogenization scheme for the diffuse interface region.