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Aaaahhhhh yes i forgot about sasuke but i am pretty sure he would had nuf chakra to fight a little and plus kisame was there. We truly don't know if itachi actually feared him or not, but i still say jiraya would win in a one on one fight
( It's my opinion )
fighting someone like jiraiya in a place like that will cause a huge commotion and will draw more konoha shinobi to join the fray, so with that condition retreat is the best choice.