It says: All eccounters of difficulty I - that little stick at the end means "one".It' saying ALL encounters of difficulty - which means - in my opinion- all 4 levels or at least 3 - I won't worry about only the first encounter so far
That's not an OR challenge. Both are required.It has the option of doing 5 minutes productions 20 times, with 5 production buildings you can finish in a bit over 20 minutes, if more are available in less time, surely faster than finishing Level I and with no troops costs or goods for negotiation.