I think Raging Deadstar is right about the actual mechanism for making peace with an AI. It is very difficult to make peace when you are at war with an AI, if not completely impossible. You might want to "force" the Phong to send you a truce though.
However, feel free to disregard the demand of your bigger neighbour; the AI cannot check if you comply with its demands, and will only be angered if you refuse the demand (you can accept it and do nothing, or even ignore the request, and it will be fine for the AI). In this case, disregarding the request might be better, as you cannot really make peace with another AI Empire.
Quote:
This Message was supplied by the Deadstar Continuum, For Victory, Honour and Blowing up Agricultural Colonies with No defenses because they were a "threat".
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This is Admiral Petrach, commanding officer of the GTD Aquitaine. Well done Deadstar! You will receive a hero's welcome back at the fleet for your extraordinary contribution to the Alliance war effort. Going above and beyond the call of duty, you took down every single Agricultural Colonies, despite the impressive array of non-existing defences that were in your way. Your achievements have been well note by the highest officers serving the Alliance today, and you are hereby awarded the Medal of Gallantry for your outstanding courage when fighting unarmed civilians and disabled warships.
Thanks to your amazing performance (did I mention you have flown an incredible mission), the enemy does not have access to vital supplies such as food, water or tea. All enemy crews have powered down their vessels and surrendered because of this shortage of resources, to save both their lives and the plot that was in a deadend. The forces you faced were indeed more dangerous than class A threats because of their unpararalelled firepower; since the enemy required them to use their Masticator Superdestroyers, they were equivalent to these juggernauts, and thus equally as dangerous. The fact that these targets of opportunity were full of innocent civilians is irrelevant; as explained above, the colonies were virtual juggernauts, and only crew members are allowed within warships. Therefore, the colonies were manned by a horde of soldiers (we did tell you the enemy has enrolled the whole nation in the army, didn't we?).
Admiral Petrach for the Foundation for Galactical Glory, Grandeur and Glamour. "Make LOVE*, not war"
(* LOVE: Large Obliterating Vicious Exterminator)