The correct answer is: C. Either I or II is implicit
The statement says that the two countries have signed a fragile pact, but the vital sovereignty issue remains unresolved. This means that the pact is not likely to last long, because the two countries are still at odds over a major issue. This suggests that either assumption I or assumption II is implicit.
Assumption I is that the two countries cannot have a permanent peace pact. This is because the pact is fragile and the vital sovereignty issue remains unresolved. If the two countries cannot resolve this issue, then the pact is likely to break down.
Assumption II is that the two countries may become hostile again after a short spell of time. This is because the pact is fragile and the vital sovereignty issue remains unresolved. If the two countries cannot resolve this issue, then the pact is likely to break down, and the two countries may become hostile again.
Therefore, either assumption I or assumption II is implicit in the statement.