The human’s nature has always been the same. From the fear of the unknown and greed of power, they try to do crazy thing and create enemy of their own. Seriously, the group who were sent to kill them should have died a more cruel way. If it was me, I will turn on camera and rip the head off of the last survivor and send it to whoever in charge as a warning.
Negotiating my ass, good thing here is that MC and Elf are smart enough to realize how cunning government people is and set up some walls so that they cannot easily pierce through. If they have magic, they can also learn summoning magic and summon something to protect themselves. If this negotiation really fails, they will have to stand their ground against the government of the entire Japan.