Option 1 states that an emergency can be declared under Article 352 of the Constitution of India only during war, external aggression, or internal disturbance. This option is incorrect as it does not include armed rebellion as one of the conditions for declaring an emergency.

Option 2 states that an emergency can be declared under Article 352 of the Constitution of India only during war, external aggression, or armed rebellion. This option is correct as it includes all the conditions mentioned in Article 352.

Option 3 states that an emergency can be declared under Article 352 of the Constitution of India only in the case of a failure of constitutional machinery in the state. This option is incorrect as it does not include the conditions of war, external aggression, or armed rebellion.

Option 4 states that an emergency can be declared under Article 352 of the Constitution of India only in the case of financial instability in the country. This option is incorrect as it does not include the conditions of war, external aggression, or armed rebellion.

The correct answer is option 2 as it includes all the conditions mentioned in Article 352 of the Constitution of India for declaring an emergency.