Step 1: Recall the definition of the Fittig reaction.
The Fittig reaction is a chemical reaction that involves the coupling of two aryl halides in the presence of sodium metal under dry ether conditions to form a biaryl compound.
Step 2: Evaluate each option based on the definition.
\begin{itemize}
\item (1) Reaction between two aryl halides in the presence of Na/dry ether: This matches the definition of the Fittig reaction. A general representation is:
$$ \text{Ar-X} + 2\text{Na} + \text{Ar'-X} \xrightarrow{\text{dry ether}} \text{Ar-Ar'} + 2\text{NaX} $$
where Ar and Ar' are aryl groups and X is a halogen.
\item (2) Reaction between two alkyl halides in the presence of Na/dry ether: This describes the Wurtz reaction, which is used to couple two alkyl halides to form a higher alkane.
\item (3) Reaction between aryl halide and alkyl halide in the presence of Na/dry ether: This describes the Wurtz-Fittig reaction, which is used to couple an aryl halide and an alkyl halide to form an alkylbenzene.
\item (4) Reaction between two aryl halides in the presence of Fe/dry ether: Iron (Fe) is typically used as a catalyst in electrophilic aromatic substitution reactions (like halogenation of benzene) and is not the reagent used in the Fittig reaction. The Fittig reaction requires sodium metal.
\end{itemize}
Step 3: Identify the correct description of the Fittig reaction.
Option (1) correctly describes the Fittig reaction.
Final Answer:
\[
\boxed{\text{Reaction between two aryl halides in the presence of Na/dry ether}}
\]