I've recently got the khazad-dum expansion and on my first play I got the treachery card Watchful Eyes, I'm still a fairly new player and my question is: if I don't have any enemies to do combat with does the combat phase still take place and does watchful eyes condition activate?

Yes. Even if you don't have to combat, the phase still hapens.

And if your hero with Watchful Eyes attached is exhaust, the effect takes place…

Lovely, thanks.

Not the response I wanted ;P