eyes twinkling

Hi,

Can you help me to determine what "twinkle" means in this sentence?

"Look in your book.” The young prince did, and to his surprise, found a parchment identical to the one he had just sent. “You will never be without a petition,” the old man explained, with eyes twinkling. “There is no limit to the number that you can send.

In my dictionary, twinkle could mean:
1: To be bright or sparkling, as with merriment or delight:
2: To blink or wink the eyes.

So which one do you think the twinkle means? 1 or 2 ?

Thank you.