Is The Great Gatsby by F. Scott Fitzgerald a love story that embraces American ideals, or a satire that comments on/critiques American ideals?

This novel is much more of a critique of American ideals than a work that embraces those ideals. It was written during an era in which belief in the American Dream— the idea that someone can come from nothing and achieve success and wealth and happiness with simple hard work and perseverance—was high. However, the novel shows that the American Dream is not realistic, that it is only a fantasy. George Wilson, for example, works very hard, honestly toiling away in order to improve life for himself and his wife, and yet he never makes any headway. Jay Gatsby, on the other hand, appears to have achieved the Dream, until we realize that all of his money has been made illegally, and the American Dream cannot be achieved through criminal endeavors. In the end, Nick Carraway, the narrator, says,

"Gatsby believed in the green light, the orgastic future that year by year recedes before us. It eluded us then, but that's no matter—to-morrow we will run faster, stretch out our arms farther . . . . And one fine morning— So we beat on, boats against the current, borne back ceaselessly into the past."

That green light functions as a symbol for the American Dream itself, the promise of possibility that characters in the novel can never quite reach. They, and we, might continue to believe that if we just work harder, for one more day, we will get there, but we never do, and—for Fitzgerald, it seems —we never can. The current keeps pushing us further and further from our goal.

Based on the two choices you have, it would be most accurate to say that F. Scott Fitzgerald's The Great Gatsby is a satire critiquing American ideals. On the one hand, F. Scott Fitzgerald's The Great Gatsby has many elements of a love story, as most of the plot focuses on the love affair between Gatsby and Daisy, but to say that the story embraces American ideals would be a mistake.
A large portion of Fitzgerald's message is aimed at critiquing the myth of the American Dream (the belief that American citizens can get whatever they want, improve themselves, and achieve happiness simply by working as hard as possible), and Gatsby's tragic downfall can be seen as symbolic of this critique. Consider, for instance, that Gatsby is a materialistic man who's spent his whole life working to acquire possessions. In that case, one could argue his death is a repudiation of these values and evidence that Fitzgerald is critiquing them. As such, I think it would be most accurate to say that the novel is a satire critiquing American ideals.