They're going to take Naruto one way or another. Jiriya gets in the way so they decided to kill him. Itachi doesn't care whether he's the informant or not. Who wins?
I don't know why Itachi said they'd lose if they took him on, or why Kisame believed him. True, Itachi would be holding back probably, but even so they should have the abilities to beat him.
Kisame wondered the same thing. Itachi made up an excuse about having already used his eyes twice and wanting to rest, and just having no problem with being patient on Naruto.
Itachi didn't say they'd lose, just that he'd rather bow out for the moment.
it was itachi's way of checking up on sasuke without causing a war. he told the hokage that he'd be dropping by to remind them he was still kicking and ready to spill the beans as well, though on his visits he wouldn't kill unnecessarily, especially the guy who will nurture young naruto: the "brother" of sasuke who will drive him to be strong through rivalry in itachi's absence, and protect sasuke at the same time.
itachi and kisame would eat jiraya alive if they truly intended to
i believekisame is below itachi i believe because itachi is incredibly skilled in genjutsu and is extremely smart. itachi could probably solo jiraiya because he was able to take down kabuto in dragon sage mode with "help" from sasuke.the truth sasuke was actually sorta in the way in that fight.