public void ResolveCombat(Party party1, Party party2)
    {
        foreach (var unit1 in party1.Units)
        {
            foreach (var unit2 in party2.Units)
            {
                Party1Atk += unit1.Atk - unit2.Def;
                Party1Def += unit1.Def - unit2.Atk;

                Party2Atk += unit2.Atk - unit1.Def;
                Party2Def += unit2.Def - unit1.Atk;
            }
        }
    }

What about a more data-based approach:
foreach(wizard in world)
{
    foreach(undead near wizard)
    {
        wizard attacks undead
    }
}
foreach(archer in world)
{
    foreach(unit near archer)
    {
        archer attacks unit
    }
}
etc.