The Palitana Temples are located near the city of Bhavnagar, which is Option 1. These temples are situated on the Shatrunjaya Hill in the Palitana town of the Bhavnagar district in the state of Gujarat, India. Let`s delve into the reasoning behind this answer:

1. Bhavnagar: The Palitana Temples are situated in the Bhavnagar district of Gujarat. Bhavnagar is a major city in the region and serves as the administrative center. It is well-connected to various parts of the state and has transportation facilities to reach Palitana.

2. Mount Abu: Mount Abu is a hill station in the Aravalli Range of Rajasthan, which is a neighboring state of Gujarat. While Mount Abu is renowned for its scenic beauty and the famous Dilwara Temples, it is not the correct location for the Palitana Temples.

3. Nasik: Nasik, also known as Nashik, is a city in the state of Maharashtra. It is famous for its religious significance and is home to several ancient temples, including the famous Trimbakeshwar Shiva Temple. However, Nasik is not the correct location for the Palitana Temples.

4. Ujjain: Ujjain is an ancient city in the state of Madhya Pradesh, known for its historical and religious significance. It is home to the famous Mahakaleshwar Temple, one of the twelve Jyotirlingas dedicated to Lord Shiva. However, Ujjain is not the correct location for the Palitana Temples.

In conclusion, the Palitana Temples are located near the city of Bhavnagar in Gujarat, making Option 1 the correct choice. These temples are a significant pilgrimage site for followers of Jainism, housing around 900 temples spread across the Shatrunjaya Hill. The main temple, known as the Shri Adishwara Temple, is dedicated to the first Jain Tirthankara, Lord Rishabhdev. The temple complex offers breathtaking views of the surrounding landscape and attracts devotees and tourists from around the world.