[x] Shown here, Gaara closes his eye and uses the Third Eye as a means to see what is happening to Ohnoki. What this means is that, the Third Eye is CONNECTED TO GAARA'S OPTICAL NERVE. Itachi knowing full well Gaara is using the eye to scout him while he's covering his eyes (as it is almost impossible to not notice a Giant eye above you in such an open area where Sasuke fought Deidara), would do one of two things: Use Amaterasu in the same manner he did to Nagato's Chimera on the eye
OR, put the eye in any variation of Genjutsu, one most likely being Ephemeral [x] and notice what Naruto says; "I wasn't even looking in to his eyes". It doesn't matter if Gaara is shielding his eyes with his Sand and utilizing his Third Eye; no eye contact is needed for Ephemeral to take effect, and the Third Eye is just as susceptible to Genjutsu as Gaara is due to the linking of it to Gaara's optical nerve which is inherently connected to the chakra network as noted when Tobirama was talking about when an Uchiha loses a loved one (loses love) chakra sprouts in their brain connected to their optic nerve [x], and the optic nerve therefore is part of the chakra network. What we know about Genjutsu is that it tampers with a persons chakra network; so by this process, Itachi can put Gaara in a Genjutsu through the Third Eye. The extent of the Genjutsu depends on how much Itachi wants to give away. Ephemeral is a reality simulation Genjutsu and Itachi controls what the opponent sees or feels [x]. In this case he tormented Naruto. He can just as easily simulate what Gaara believes to be normal reality, and Shunsin up to Gaara and hit him with a point blank Amaterasu that will spawn instantly on Gaara as noted by Zetsu HERE and the match will be subsequently over as the Sand will not be faster than instantaneous and will finish off the currently within a Genjutsu Gaara, who is now ablaze due to Amaterasu.
Note: Some of the portions of this describe how Itachi would put Gaara down, which is why some other techniques are included rather than just basic genjutsu.
