"Italy is attempting to make peace with terrorism. It faces the danger of earning Turkey's eternal hostility," Mr Yilmaz said.
His comments were likely to inflame the growing dispute between the two countries over the fate of the Kurdish guerrilla leader Abdullah Ocalan, who was detained in Rome last week while trying to enter Italy on a false passport.
Turkey is seeking Mr Ocalan's extradition for treason. He heads the Kurdistan Workers Party, which has been fighting for Kurdish self-rule in south- east Turkey for 14 years. More than 29,000 people have died in the conflict.
"The Italian government is making mistake after mistake," he said. "Every mistake made on this issue will certainly have a very heavy price. The Turkish state is capable of making sure it is paid," Mr Yilmaz added. (Reuters)Reuse content