This has been brought up a few times in our group. Infantry can only move one space, so if they move in to attack, they pretty much have to fight until they're eliminated or the defending player is eliminated? They can't move back one space, correct?
"Retreat" is not counted as a move. So the attacking infantry can move "back" to their original square. Or maybe a better way of looking at it was the attacking infantry moved to the border between its original square and the defending square, and then was stopped at the border.
It is the defender who cannot move or retreat during an attack. The defender has to beat off the attack or lose every piece (except for submarines). But the attacker always has the option to stop the attack.