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There was no doubt that the terms laid out by Minister Compton were unacceptable to the Mexican Republic Government. They could not dare to choose any of the three options.
If President Juarez was willing to compromise on the issue of the Empire, why bother leading a rebellion? It's known that as soon as Maximilian I ascended to the throne, he pardoned political prisoners and even offered Juarez a high position.
To accept the restoration of Maximilian I now would be a complete denial of the decade-long revolution. This uprising would no longer be an anti-empire, anti-feudal movement, but a political power grab.
Compensation was out of the question. If they had that much money, the Republicans would have settled the domestic opposition by force long ago, why would they need to compromise?