You should take the "Honesty is the best policy approach" and say you were terminated. I'd recommend completing that section with the words, "Honestly, I was terminated." Ultimately, if you get an interview, the employer will most likely find out anyway, and it will give you an opportunity to explain the nature of the termination.
However, you shouldn't speak negatively about the employer who terminated you, just give facts and the circumstances surrounding the termination. The prospective employer "should" appreciate your honesty. If you're qualified for the job, let your qualifications speak for you on the application.