Twenty Italian troops have died so far in Iraq
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The Italian parliament has defeated a motion tabled by the centre-left opposition, calling for the withdrawal of Italy's 3,000 troops from Iraq.
Earlier, Prime Minister Silvio Berlusconi told parliament that Italian forces would stay in Iraq until it was able to govern itself.
He said there was a clear timetable for the transfer of power to Iraqis that would give the UN a bigger role.
He was speaking after talks with US President George Bush in Washington.
Mr Berlusconi told parliament that a candidate had been identified to head an interim Iraqi government, although he had yet to accept the position.
Mr Berlusconi's address came hours after the funeral near Venice of an Italian soldier who was killed in Iraq on Monday.
Corporal Matteo Vanzan, 23, who died in clashes with Shia militia in Nasiriya, was the 20th member of the Italian forces to die in Iraq, but the first killed in combat. The other 19 were killed in a bomb attack in November.
'Duty and honour'
Mr Berlusconi told MPs that to withdraw from Iraq now would represent "an offence to the memory of the fallen and the wonderful and hard job of our soldiers".
"It is our duty and our honour to stay until the very end with those who are making sacrifices and taking risks to defend the principles of the UN charter," he said.
"Those who proclaim peace but do nothing to support it, help the enemies of peace."
But some opposition MPs said Mr Berlusconi had wrongly portrayed the Iraq deployment as a peace mission.
"Today we find ourselves caught up in a war that the Italian parliament never agreed to," said Piero Fassino, leader of the main opposition party, the Democrats of the Left.
Correspondents say there is growing public pressure for a withdrawal of the Italian contingent, the third largest force in the US-led coalition.
An opinion poll published by La Repubblica newspaper on Thursday suggested that 59% of Italians want their troops to leave Iraq even if the UN asks Italy to remain in the country after the June handover.