Genjutsu or Reality?

is episode 206 of the original Naruto anime.

Synopsis
Naruto, Sakura, Kurenai, Yakumo and Team 8 return to Konoha, which appears to have been destroyed in their absence. They learn from the head of the Kurama clan that they are trapped in a genjutsu that has enveloped the entire town, and Naruto, Sakura, and Team 8 manages to escape with the help from Unkai. They then enter the mansion to find Kurenai and Yakumo.