Italian premier Silvio Berlusconi has acknowledged that his centre-right party suffered defeats in his political stronghold of Milan and in the southern city of Naples - outcomes that observers say could undermine his government's stability and his leadership.
Mr Berlusconi had campaigned hard ahead of the local elections and urged Italians to go to the polls to signal their support for his conservative coalition government in Rome.
"This time we didn't win, but we continue. I am a fighter. Any time I have lost, I tripled the effort," Mr Berlusconi told reporters in Romania, where he was on an official visit.
Final results from the runoff elections held yesterday and on Sunday appeared to support recent opinion polls that have shown his popularity slipping as he faces a trial in Milan in a prostitution scandal.
Critics have said most of his energy has been involved defending himself from charges that he paid for sex with an underage Moroccan teenager then used the premier's office to try to cover it up.
The votes mark a setback for the 74-year-old Mr Berlusconi personally and for his local candidates, analysts say, and will likely raise questions about his leadership.
In Milan, with all polling stations reporting, Mr Berlusconi's candidate, Mayor Letizia Moratti, won about 45% of the vote in the runoff against Giuliano Pisapia of the centre-left.
Milan, Italy's financial and fashion capital and Mr Berlusconi's own power base, had been run by conservative mayors for almost two decades.
The city also is a crucial power base of a key government ally, the Northern League, and the poor showing is likely to deepen rifts between Mr Berlusconi and the League's leader, Umberto Bossi.
The League had been critical of the electoral campaign in Milan and lukewarm toward ms Moratti and it will no doubt be angry about having lost north Italy's most important city.
However, Mr Berlusconi said he had spoken by telephone to Mr Bossi and said the government was solid.
"We will continue together, in the direction of reform," Mr Berlusconi said after the vote.
The government has been criticised for not taking on tough reforms to help stimulate growth. That was one of the reasons that Standard & Poor's recently downgraded the outlook for Italy to negative.
In the Naples run-off, the leftist candidate Luigi de Magistris, a former magistrate, won by a landslide with 65% of the vote, compared to 35% for Mr Berlusconi's candidate, Gianni Lettieri, according to the final returns.
The centre-left has long controlled Naples, but Mr Berlusconi had been hoping to take control of it as the city grapples with a long-standing garbage collection crisis and high unemployment, especially among youths. The premier had repeatedly vowed to clean up the city's streets from piles of garbage and sent soldiers to help do that just before the vote.
"This vote marks a clear defeat of the right, a strategic defeat," said Stefano Folli, a top political analyst. "It gives the sense that Berlusconi's political season is drawing to a close," he said. "Let's see if he will be capable of handling his own succession."
An opposition candidate also won the race for mayor in the Milan suburb of Arcore where Mr Berlusconi has a villa, dealing a defeat to a Northern League candidate - an embarrassment for the Italian leader if not a politically significant race.