I would dig the hole at least 6 feet down, and 3 times bigger than a 3 gallon rose bush. Mix the clay soil with peat and compost, halved, so you end up with 1/1/1 mix (adding in 1/3 of the clay)
The reason I would dig so deeply is you are saying clay and water. This can cause root rot. Loosening up the soil mix so deeply will allow the roots to breathe and go deep quicker than if you didn't loosen clay.
I see no reason that a 3 gallon rosebush could not survive that space, if you plan ahead.