The Image posted above is a picture of Gotham City. However this fight is not taking place in Gotham. I simply used this as an example of what type of city we are using for our battle location. The city in which Batman and Ironman are fighting is a city neither individual has ever been in before.
There is a city full of bystanders, lets say Over one million of them.
The cities Police may get involved. However the national guard will not.