I believe Iroh would easily beat his younger brother, he was portrayed as the master teacher that never gets involved in his pupils fights because he would kick all the ass. I think you would be hard pushed to find anyone that thinks Ozai was better then one of the most likable characters in the show.
Iroh states, in the final episode, that he is unsure if he could best his brother. I personally think this battle a toss up. Ozai was a match for the Avatar under the power of Sozin's Comet and had the potential to almost single-handedly burn down an entire continent, and Iroh was able to conjure a fire blast powerfull enough to bring down the walls of Ba Sing Se and reconquer the city while empowered to the same level. I think Iroh is obviously the more technically skilled firebender, but Ozai possessed amazing power derived from his rage and he can channel that into his firebending. I do think Iroh technical skill should trump Ozai's rage however. Iroh learned firebending from the dragons and created and mastered the technique of redirecting lighting (an ability Ozai does not possess.)
Maybe Iroh would win this battle 6/10 times. I think the fact that he acknowledges he may not be able to defeat Ozai means a lot. But the fact that Iroh knows how to both create lightning and redirect it, and Ozai only knows how to create it, should give Iroh the victory in a small majority.
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