Well, it certainly would be a tough battle, seeing as they both are very strong shinobi. I think it would depend on how sick Itachi was at the time of the fight. If he were ill like he was at the time of his death, or perhaps even the whole of Shippuden, it would be neck to neck and I'm not capable of predicting the outcome of it (though I'm pretty sure Nagato WOULD win...). However, comparing the stats given in the guidebook where Itachi is tied for the highest with Jiraiya as he is now (and Jiraiya was able to give Nagato a run for his money), I have no doubt that Itachi would be able to defeat him.
