I do not know exactly what density functional method should be used for CeO2 nanocluster (LSDA? +U ? etc), but it seems pretty clear to me that your initial structure has the atoms too close to each other. Some Ce-O distances are only 2 Å. A unit conversion error?
The attached script shows the LSDA calculation I did for your system. I believe the ground state is spin-polarized. The initial forces are ca 20 eV/Angstrom on each Ce atom, which is quite a lot. The cluster expands towards equilibrium, does not collapse.
BTW: for rare-earth elements, I would try out the SG15 pseudopotentials also. May be better for this sort of studies than the FHI ones.
Hope this helps,
Jess