Under the spell of Krishna’s bewilderment, Arjuna is overwhelmed and no longer ready to fight. Upon beholding (tān samīkṣya) all (sarvān) the near and dear (bandhūn) assembled there (avasthitān), Arjuna (sa kaunteyaḥ) becomes overwhelmed with (parayāviṣṭo) compassion (kṛpayā). His compassion is directed toward the impending bodily losses on the battlefield and his evaluation is based on bodily relationships with his kith and kin. He expresses the following (idam abravīt) in a grief-stricken condition (viṣīdann). (BG 1.27)
Seeing (dṛṣṭvemaṁ) his own people (sva-janaṁ) present (samupasthitam) with a desire to fight (yuyutsuṁ), the limbs of his body are quivering (sīdanti mama gātrāṇi) and his mouth is drying up (mukhaṁ ca pariśuṣyati). (BG 1.28) His body is trembling (vepathuś ca śarīre me), his hair is standing on end (roma-harṣaś ca jāyate), the Gāṇḍīva bow is slipping from his hand (gāṇḍīvaṁ sraṁsate hastāt), and his skin is, in fact, burning (tvak caiva paridahyate). (BG 1.29)
Arjuna is thus introspecting and experiencing self-awareness on the bodily platform. An outstanding quality of Arjuna that is shining forth here is his willingness to be vulnerable before Krishna along with his expressions of self-honesty. We can notice a stark contrast between the aforementioned diplomatic dealing of Duryodhana and this straightforward confession of Arjuna. After evaluating the situation through the lens of bodily compassion, Arjuna next puts forward his second line of reasoning, which is based on self-awareness on the mental platform.
He is unable to (na ca śaknomy) stand here any longer (avasthātuṁ) and his mind is reeling (bhramatīva ca me manaḥ). He sees (paśyāmi) only causes (nimittāni ca) of misfortune (viparītāni). (BG 1.30) And, he does not (na ca) foresee (anupaśyāmi) any good (śreyo) in killing (hatvā) his own people (sva-janam) in this battle (āhave). He does not (na) seek (kāṅkṣe) victory (vijayaṁ) or kingdom (na ca rājyaṁ) or happiness (sukhāni ca). (BG 1.31)
Arjuna begins to question everything. What (kiṁ) is the value of this kingdom (rājyena) for them (no)? What (kiṁ) is the value of the associated pleasure (bhogair) or life itself (jīvitena vā), when those for whose sake (yeṣām arthe) we (no) are desiring (kāṅkṣitaṁ) the kingdom pleasures (rājyaṁ bhogāḥ) and happiness (sukhāni ca) – those very persons (ta ime): teachers (ācāryāḥ), fathers (pitaraḥ), sons (putrās), grandfathers (tathaiva ca pitāmahāḥ), maternal uncles (mātulāḥ), fathers-in-law (śvaśurāḥ), grandsons (pautrāḥ), brothers-in-law (śyālāḥ) and other relatives (sambandhinas tathā) – are assembled on the battlefield (’vasthitā yuddhe) ready to give up their lives and wealth (prāṇāṁs tyaktvā dhanāni ca)? He does not (na) wish (icchāmi) to kill (hantum) them (etān) – even (api) for the sake of (hetoḥ) a kingdom spanning the three worlds (trailokya-rājyasya), what to speak of an Earthly kingdom (kiṁ nu mahī-kṛte) – even though they might otherwise kill him (ghnato ’pi). What pleasure will they derive from killing (nihatya) the sons of Dhṛtarāṣṭra (dhārtarāṣṭrān naḥ)? (BG 1.32-35)
In summary, Arjuna is considering two reasons for not fighting so far: (1) he is feeling bodily compassion toward his kith and kin, and (2) he is unable to foresee any good in killing his own people.