Let's assume you have started a new game as Birds, and want to offer an alliance to the Privateers. You could send the following commands (the same as above):

allies add 5
allies config 5 +m ~c -s

The first command would offer the alliance, the second one defines that you want to offer mine level (unconditionally) and combat level (conditionally).

PHost would confirm that by sending you the following alliance status report:

(-h0000)<<< Alliance Status Report >>>

Race  Offered to Race  Allowed by Race
----  ---------------  ---------------
  5   -s -p +m ~c -v

The alliance is now in status offered until the Privateers offer it back. Until they do that, they cannot use your friendly mine level offer. As you see, the default value for alliance levels is "not offered" ("-").

The Privateers will be notified by your offer, they receive the following message:

(-h0000)<<< Alliance Status Report >>>

Race  Offered to Race  Allowed by Race
----  ---------------  ---------------
  3                    -s -p +m ~c -v

They could now send the following commands:

allies add 3
allies config 3 ~c

This would complete the alliance. Your alliance report would now look like this:

(-h0000)<<< Alliance Status Report >>>

Race  Offered to Race  Allowed by Race
----  ---------------  ---------------
  5   -s -p +m ~c -v   -s -p -m ~c -v

Since you have offered +m to the Privateers, they'll be immune to your minefields. Since they have not offered mine level in return, their minefields still are a danger to you.

You have offered ~c, and they have offered ~c, too. Your ships will no longer attack each other. The Privateers could also have offered that level unconditionally, +c, so they would not have attacked you even if you drop your ~c. If they had not offered you combat level at all (-c), your ships would still fight Privateers.