Naturally, our peace loving country not wishing to take the initiative of breaking the pact could not resort to perfidy

A moral dilemma is shown here

Explanation:

Starting with the last word, perfidy is a deliberate breach of faith or trust; in the context of war - we can assume that this the case because of the word peace loving country - perfidy can actually lead to warcrimes, like waving a white flag and then kill the enemy.

So the moral dilemma is that a country is very likely to be uncomfortable with a pact, the other side probably being a bit of a war loving country, but diplomatic relations deny the possibility of breaking the pact.

The part not wishing to take the initiative of breaking the pact is, if I'm not mistaken, a subordinate adjective clause that refers to the noun country.

So this country, not wishing etc., could not resort to perfidy either. Because that would be even worse, considering the fact that it is a peace loving country.