Alle Mädchen tragen rosa Unterhosen.

“Unterhosen” is a generic word for underwear, and can be used for both men’s/boy’s and women’s/girl’s underwear, whereas “panties” is a strongly gendered word, specific to women’s / girl’s underwear. As such I think “underwear” would be a better translation here, especially given that “Unterhosen” is the word being taught here, and we don’t want to give people the wrong impression of its meaning.