The option that seems to be the clearest and most objective summary of the excerpt is the second one: Paine says that war is terrible, and ordinarily nothing could have convinced him to support it. However, he also believes that if a person or a group commits severe crimes against him, that party should be punished, no matter who they are.
Paine makes it very clear from the start: war is murder and he wouldn't usually support it. The only situation that would force him into doing so would be if he were directly attacked by that offender. It does not matter if the offender is an individual or a group of people, a king or a common man... The one or ones who harm an equal should be punished accordingly.