Italy ended Iraq's dreams of winning only their second Olympic medal on Friday, beating the war-torn country 1-0 in the bronze medal match.
In an emotionally charged match in Thessaloniki, Italy's players wore black armbands in honour of an Italian journalist who was killed by kidnappers in Iraq.
Iraq captain Abdul Wahab presented his counterpart Andrea Pirlo with a bouquet of flowers in a touching gesture before the game.
Parma striker Alberto Gilardino headed home a Pirlo cross after eight minutes to seal victory and deny Iraq a second Olympic medal in the war-torn country's history.
Italy won gold at the infamous 1936 Berlin Games and the bronze at the 1928 Amsterdam Olympics.
Argentina take on Paraguay in the final to be played at the Olympic Stadium in Athens on Saturday.
Reporter Enzo Baldoni was seized by Islamic extremists on a road between Baghdad and Najaf. The Italian government said on Thursday that his captors had killed him.
FIFA president Sepp Blatter defended the decision not to cancel the match despite calls to do so as a mark of respect for Enzo Baldoni, who was killed after going missing on August 19.
"It is very sad and our thoughts go to the family of the victim," he said. "The players may not have the same enthusiasm but football works for solidarity and solidarity will win."
Blatter added: "It is not for show, it is for life. The Olympics is part of life. It is the message of football and the Olympic Games."
SOMBRE MOOD
In Baghdad, cafes and roadside stalls were crowded with Iraqis watching the match. The mood turned sombre as Iraq fell behind but despite the loss, Iraqis were proud.
"Winning or losing is not the point. Iraq has proved to the world that it has a great team. We never expected to get this far in the Olympics," said Ahmed Sabah, 23, a computer student who watched the match at an outdoor garden cafe.
"Iraq was representing the Arab world and we are very proud of Iraq. This team has brought joy to out hearts. It's the only joy we've had since the end of the war," said Ahmed Naash, 21.
Naash and his friends said they had brought loaded guns in their car to fire into the air in celebration if Iraq won. But on Friday, they said, the guns would have to stay silent.
