It was Cannavaro who was at fault for the only goal of the game in Elche. His poor clearance allowed Valencia striker David Villa to fire home the winner against the world champions with 13 minutes to go.

He said: "This defeat hurts because when you create chances and you do not score it is a pity.

"You can only applaud a goal like Villa's. We are not machines and we do make mistakes, although I did not expect that my clearance would be met by a fine volley."

The Real Madrid defender is convinced this setback will not affect the Italians, who aim to follow up their World Cup triumph with the title at Euro 2008.

He said: "It was a good performance. We played a very good game and we have proved we are a solid team that can play against anyone. The important thing is to bounce back. This was a friendly and official games are a different story."

Bayern Munich striker Luca Toni is also upbeat about Italy's chances in the summer and believes his side are on track to arrive in Austria and Switzerland in top form.

He said: "There are games in which you are unable to score. But you cannot throw away the good work we have done. It is not easy to come to Spain and give a good performance and we have done just that.

"I think Spain were fortunate to win but we showed that we are a strong outfit. We have lost this game but we are nevertheless optimistic."

Roberto Donadoni4s side face a tough task if they are to add the European title to their world crown, after being grouped with Holland, France and Romania in the finals of Euro 2008.

Italy, who beat France on penalties to win the World Cup in Berlin two years ago and also faced Les Bleus in qualifying, will meet them again in their last Group C match in Zurich on June 17.

Toni added: "We want to play a great European tournament. We will try to do well, we are all focused on having a great tournament. We are aware of our potential and the fact that we are a great group."

Donadoni has yet to renew his contract with the Italian Football Federation, which ends after Euro 2008, leading to speculation that World Cup-winning coach Marcello Lippi could return to guide the Azzurri, having stepped down shortly after the success in Germany.

But Toni does not believe Donadoni4s future will interfere with the team's preparations.

He said: "We have full confidence in our coach. We are all rowing in the same direction and want to do well at this summer4s tournament. That is the coach and the team's main focus right now."