Potsdam declaration. Which best summarizes the intent of this passage?

I think this is the complete question:

Read this passage from the Potsdam Declaration.

We call upon the government of Japan to proclaim now the unconditional surrender of all Japanese armed forces, and to provide proper and adequate assurances of their good faith in such action. The alternative for Japan is prompt and utter destruction.

Which best summarizes the intent of this passage?

Japan will be allowed to choose its conditions for surrender.

Japan must surrender without any conditions, or face destruction.

If Japan does not surrender, the Soviet Union will invade.

If Japan chooses to keep fighting, the Allies will ask for peace talks.

The answer would be:

Japan must surrender without any conditions, or face destruction.