Italian Prime Minister Silvio Berlusconi has said his country will not be deterred by a bomb in Iraq which claimed the lives of 18 Italians.
It remained committed, he said, to helping Iraq rebuild and form a government in "security and freedom".
But opposition leaders demanded the recall of Italy's 2,400 peacekeepers, calling their mission a mistake.
At the bomb site in Nasiriya, rescuers worked into the night in the hope of finding survivors under the rubble.
Italian officials confirmed on Wednesday evening the deaths of 16 Italian military and police personnel, two Italian civilians and eight Iraqis.
A further 20 Italians and 59 Iraqis were wounded in the attack in which a suicide squad driving a petrol tanker rammed Italian police headquarters in Nasiriya, a Shia Muslim town in the south of the country.
It was the single biggest loss of life for a non-US coalition member of the coalition since the start of the war in Iraq in March.
In other developments:
• US forces in Baghdad pursued what they said was a mortar crew, killing two suspected militants, wounding three and capturing five. Elsewhere in the city, a US warplane destroyed a warehouse the Pentagon said had been used by militants
• Paul Bremer, the US administrator in Iraq, emerged from emergency talks with President Bush in Washington to say the administration was determined to fight terror and hand over power to Iraqis - he also defended the record of the US-appointed Iraqi Governing Council
• A leaked CIA report warned that the effort to rebuild Iraq as a democracy was in danger of collapse, with growing numbers supporting armed opposition to coalition rule.
'Troops out'
Prime Minister Berlusconi's words were echoed by the Italian President, Carlo Azeglio Ciampi, who said the troops in Iraq were there "with a mandate and the will of parliament".
"All of Italy is behind them," he said.
However, the leftist opposition bitterly condemned Mr Berlusconi's decision to contribute troops to the US-led occupation.
"They were sent to an Iraq in flames because the government wanted to do a favour for the Bush administration without taking risks into consideration," said Pietro Folena of the main opposition party, the Democrats of the Left.
"Now the Italian soldiers must come home. It is the only right thing to do at this moment."
Paul Bremer statement
On the ground in Iraq, Italians expressed shock at being chosen as the target for the bombers.
"This attack really surprised us," said Marina Catena, a political counsellor at the Italian embassy in Baghdad.
"The contingent had received no threat."
Ms Catena said that Italian embassy staff had, on the contrary, recently spent time at the police HQ after receiving a threat in Baghdad.
The BBC's Paul Adams reports from Nasiriya that the attack is not only a terrible blow for the Italians who appear to enjoy considerable local support.
It is also, he says, a worrying sign for the British-led multinational division in southern Iraq.
There had been numerous minor incidents including a spate of small bomb attacks in Basra but nothing remotely on the scale of Wednesday's bomb.
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