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People are taking this statement the completely wrong way. Kisame and Itachi knew nothing about Jirayas abilities. Kisame was just going off Jirayas hype as a Sannin. I cannot stress this enough.
Noted: Itachi already defeated Orochimaru, a Sannin when he was 13 and
imo was ≥ to Jiraya.
Jiraya can in no way beat Itachi. Especially without sage mode. No naming for the fact Jiraya has nothing to counter OP Susanno, Amaterasu and Tsyukomi. Jiraya has no experience battling with a sharigan user especially on Itachi's level.
How will Jiraya even fight him with just staring at his feet. :sy:
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This goes for Sasuke as well.
Kisame well this battle can go either way. However I believe Kisame has the upperhand, but this is debatable.