Reservation about South Island street fights (7)
I believe the answer is:
resists
'fights' is the definition.
(resisting is a kind of fighting)
'reservation about south island street' is the wordplay.
'reservation' becomes 'res' (I've seen this before).
'about' means one lot of letters goes inside another.
'south' becomes 's' (abbreviation).
'island' becomes 'i' (geographical abbreviation).
'street' becomes 'st' (abbreviation).
's'+'i'+'st'='sist'
'res' going around 'sist' is 'RESISTS'.
(Other definitions for resists that I've seen before include "Opposes, puts up fight" , "Fights back" , "Is reluctant" , "Defends" , "Defies" .)