The correct answer is option 'C': Australia and the United States of America.

Explanation:
Talisman Sabre is the largest bilateral combined training activity conducted between the Australian Defence Force (ADF) and the United States Armed Forces (USAF). It is a biennial military exercise that aims to enhance the interoperability and combat readiness of both nations' military forces.

Key Points:
1. Largest Bilateral Combined Training Activity: Talisman Sabre is known as the largest bilateral combined training activity due to its scale and scope. It involves a wide range of military assets, including ships, aircraft, ground troops, and special forces.

2. Australia and the United States: The exercise is jointly organized by the Australian Defence Force and the United States Armed Forces. It reflects the strong military alliance and partnership between the two countries.

3. Interoperability and Combat Readiness: The primary objective of Talisman Sabre is to improve the interoperability and combat readiness of the participating forces. It allows both countries to train and operate together in a realistic and challenging environment.

4. Training Scenarios: The exercise includes various training scenarios, such as amphibious landings, urban warfare, air combat, maritime security operations, and humanitarian assistance. These scenarios test the capabilities and coordination of the participating forces.

5. Participation of Other Countries: While the main participants are Australia and the United States, Talisman Sabre also involves the participation of other partner nations. These nations may contribute military assets or observe the exercise to enhance their own military capabilities and cooperation.

6. Regional Security and Stability: Talisman Sabre is not only aimed at strengthening the military capabilities of Australia and the United States but also contributes to regional security and stability. It sends a strong message of deterrence and cooperation in the Indo-Pacific region.

In conclusion, Talisman Sabre is the largest bilateral combined training activity conducted between Australia and the United States. It serves to enhance the interoperability, combat readiness, and regional security of both nations.