I see it as a reference to the Vatican, too. The AQ nutcases do not mention Italy much in their ravings, although I do believe that Ahmanutjob in Iran said that his missiles would be able to reach Italy.
I was in Italy earlier this spring, and I will say that the Italian security forces - with their vast experience in dealing with the Red Brigades (which have revived) and the Mafia - are very vigilant and seem to have good sources of information. One of the dangers that Italy has, however, is that there are large numbers of people from the Balkans there. This has become a new criminal community, and I am sure it harbors many AQ members.
I don’t think it means the Vatican, but instead, Western Civilization.