I have some intel, but I spent most of my research on the financial aspects of the game...because I'm a megacompany!
The unfortunate side effect of this choice is that I will indeed be crushed by someone who geared up for war.
Sorry if I misread you, but it looked like you were saying either accept these peace demands or be destroyed. Not much option for a story there, as I see things. Alas, that is the way with history sometimes!
So, do your worst, and I will survive as long as I can!