According to the eminent author and martial artist Donn F. Draeger, the correct English spelling is jujutsu.
"Draeger notes, You will see this spelled, by the way, like this - jujitsu, jiujitsu, and so on. This one, - jujutsu - is the correct one as far as the Romaji, the alphabetical writing (of the Japanese language)... This one - jujitsu - is a mistake, ..."
Cited by Davey, H.E. Unlocking the secrets of aiki-jujutsu.Indianapolis: MASTERS PRESS, 1997, p. 3, in which he cites Draeger, Donn F. Classical Studies in Bujutsu.New York: Weatherhill, 1973, p1.
Carl Hayes, another leading martial arts authority writes:
Japanese references are nearly unanimous in choosing the spelling "jutsu". The other spelling, "jitsu", probably came about in the following way: In spoken Japanese, a medial syllable "ju" is usually pronounced with a vowel sound that English does not have. This is the same sound represented by "u" in French hen the syllable is unaccented; and by umlaut-u in German, which can be written as a u with two little dots over it, ü, or substituted by "ue" when that written character is unavailable. Thus, in German, the surname Müller can also be written Mueller.
To pronounce this sound, round your lips as if to say "oo" but instead say "ee" and you will come pretty close. That's the vowel in the first syllable of "jutsu". To English-speakers who have no German, no French, no Greek, it sounds a lot like the "i" in "hit", and that's how the spelling "Jitsu" probably came to be.
But in Japanese spelled with Romaji (the Roman alphabet equivalent to the Japanese language), "Jitsu" would actually come out "jeets" or pretty close to that. This pronunciation would be wrong.
So, I say let's spell it "Jutsu". Those who can pronounce it "dschützu" (German-type spelling) ought to do so; the rest can say "jootsoo" (English-type spelling) and be close enough.
Finally, my own research indicates the following: While both phonetic and semantic arguments point to the fact that the correct spelling is jujutsu there is also considerable evidence in terms of usage. How do traditional/classical systems spell it in English? Is it with a "u" or an "i"?
Item 1: In The Book "Kodokan Judo" (1986) by Kano, the self defense system of judo is spelled as Kodokan Goshin Jutsu, NOT jitsu. Yet, many in our field who should know better, when they refer to this they change the spelling to "Goshin Jitsu"!
Item 2: My Own Sensei Dr. Sashio Ashida (Kodokan 8th Dan and a master in Tenshin Shin'Yo Ryu Jujutsu) told me that the correct spelling is jujutsu. Further, my conversations with Dr.Steve Cunningham, 7th Dan, Tagaki Ryu Jujutsu, also helps to confirm this spelling. Dr. Steve Cunningham (student of Sone Sensei who was student to Nagaoka, one of the first people that Kano promoted to 10th Dan) states that the correct spelling is jujutsu.
Item 3: Lowry, one of the leading practitioners of the sword in the world spells the term as Kenjutsu, NOT Kenjitsu. He was traditionally trained.
Item 4: Practitioners Of The Three Major Root Arts of Judo today, that is, Tenshin Shin'yo Ryu Jujutsu, Kito Ryu Jujutsu and Fusen Ryu Jujutsu spell it with a "u" and NOT an "i". Refer to their websites at:
http://www.zenbujujutsu.com/history.php
http://www.jujutsu.com/jujutsu/html02/n-english.htm
http://www.bushinjuku.com/arts/bushinarts/fusen/index.htm
Item 5: How Major Traditional Systems Spell The Term:
(i)Daito-ryu Aiki Jujutsu
(ii) Araki Shin-ryu Jujutsu
(iii) Itten Ryusin Tyukai-ryu Jujutsu
(iv) Tenshin Shin Shin'yo-ryu Jujutsu
(v) Yagyu Shingan-ryu Heijutsu
(vi) Asayama Ichiden-ryu Taijutsu
(vii) Kyuki Shin-ryu Bojutsu, Takagi Yo Shin-ryu Jujutsu
(viii) Takeda-ryu Aiki-no-Jutsu
(ix)Kageyama-ryu Kenjutsu
Item 6: How Other Budo/Bujutsu Systems Spell the Term:
(i) Bujutsu: http://www.myo-fu-an.com/
(ii) Taijutsu: http://bujinkan-greece.net/index.php?option=com_content&task=section&id=5&Itemid=27 (note the 9 schools of Hatsumi)
(iii) Kenjutsu: http://www.aikidojournal.com/article?articleID=294
(iv) Ninjutsu: http://www.ninjutsu.com/kotoryu.shtml
(v) Sekiguchi Shin Shin Ryu Jujutsu (Another root art of Judo): http://www.bushinjuku.com/arts/bushinarts/sgrjj/sekiguchijj.htm
Item 7: The Primary Founding Art of Aikido is Daito Ryu Aiki Jujutsu. They spell it with a "u" not an "i". Refer to their website at: http://www.daito-ryu.org/
I can provide more examples of how traditional/classical systems spell the term but I believe that what I have listed on this page should be sufficient to make the case.
Does any of this really matter if we all know what we are talking about? I think it does if we claim to be practicing Classical or Traditional Jujutsu because that is how all truly Japanese, or Japanese-based systems spell it. Second, a close examination of the English transliteration in Romaji indicates that "jutsu" means "art" or "craft" while "jitsu" means "reality" or "truth", among several other meanings that are totally unrelated to the art of jujutsu.
It is noteworthy that Romaji was initially introduced in the 17th century. After undergoing various modifications it was adopted by the Japanese Government in the early 1950s, and Romaji is currently taught in Japanese schools.
The following major Japanese martial arts use Romaji in the spelling of all their terminology:
Judo, Aikido, Karate, Jujutsu, Aiki Jujutsu, Kenjutsu and Ninjutsu.