I believe the answer is: 2. Ulysses avenges Iphitus by attacking his murderer Hercules.
Pay attention to these lines:
On young Ulysses Iphitus bestowed:
Beneath Orsilochus' roof they met;
One loss was private, one a public debt;
This lines indicated that the following action which made by the Ulysses would be driven by Ulysses' act of friendshup toward Iphitus who somehow loss in battle.
Now, pay attention to these lines:
For journeying on to Hercules, at length
That lawless wretch, that man of brutal strength,
Deaf to Heaven's voice, the social rites transgress'd;
And for the beauteous mares destroy'd his guest.
He gave the bow; and on Ulysses' part
Received a pointed sword, and missile dart:
These lines conveys that the target of Ulysses' action is Hercules who can be inferred as the one who defeat Iphitus in battle.