Itachi most likely (99.9%) killed his clan, because as it explains in the flashbacks during the Naruto/Sasuke fight, Itachi had several reasons to do so. There are several reasons why Itachi wouldn't kill Sasuke, one being that he's his kid brother and the ONLY Uchiha he had feelings for. Not to mention, who better to present a challenge later down the line than a child with 1/4 his own potential? Itachi so rarely gets a challenge, after all.