Takara Tomy revealed in an issue of Shonen Jump that they are working of a 3D Naruto fighting game for the Nintendo DS. Entitled Naruto: Shinobi Retsuden the new fighting game looks similar to the Geiktou Ninja Taisen / Clash of Ninja series. Early screenshots of the game reveal Naruto, Kakashi, Lee, Neji and Sakura as characters. The early build had six characters, so there is at least one more fighter not in the screenshots. While the top screen is used for action, the bottom screen has icons for items and attacks. Naruto: Shinobi Retusden is currently scheduled for a 2006 winter release.
Thanks for sending this in NineTailsSensei!