Passengers on an Alitalia flight to Tel Aviv were stunned yesterday when the pilot announced "Welcome to Palestine, Happy Independence Day to Palestine."
The pilot made his remarks on the day Israel was celebrating its remembrance day which marked 55 years of independence.
In 1948, and following the withdrawal of the British mandate from Palestine, the United Nations partitioned the area into Arab and Jewish states, an arrangement rejected by Palestinians.
A spokesman for Israel's Civil Aviation Authority said the authority would send a formal complaint to aviation regulators.
The spokesman said passengers on the Rome-Tel Aviv flight complained to the cabin crew about the pilot's remarks. Israeli media reported that passengers demanded the pilot come out and explain himself, but he remained in the cockpit.
Alitalia's commercial manager in Tel Aviv said the airline had not yet spoken to the pilot, but added "he won't fly to Israel any more - that's for sure".
The Italian Embassy in Tel Aviv condemmed the pilot's remark as an "irresponsible act" and said Alitalia's chief executive, Mr Francesco Mengozzi, sent a letter to Mr Ehud Goal, Israel's ambassador to Italy, saying the pilot's comment was "not in line with Alitalia's posture".
Last July, an Air France pilot referred to his destination, Tel Aviv, as "Israel-Palestine", prompting public calls in Israel for a boycott of the carrier. Air France chief executive Mr Etienne Rachou later apologised and the airline said the pilot would no longer be allowed to fly the Paris-Tel Aviv route.