Italy's flamboyant prime minister launched his country's leadership of the European Union (search) on Wednesday by telling a German lawmaker he should play the part of "kapo" in a film about a Nazi (search) concentration camp.

Silvio Berlusconi's (search) remark, which he later dismissed as a harmless joke, raised new questions among critics about his fitness to represent Europe on the world stage. Italy's richest man has been dogged by legal problems and accused of having conflicts of interest because of his vast media holdings.

Berlusconi appeared before the European Parliament in Strasbourg, France, to outline his plans during the six months Italy serves as the European Union's presidency.

Italy assumed the post Tuesday, one day after an Italian court suspended Berlusconi's bribery trial following the Italian Parliament's passage of a law granting him and other senior leaders legal immunity.

During a question-and-answer session following Berlusconi's speech, Martin Schulz, parliamentary leader of the German Social Democrats, alluded to the Italian leader's legal problems.

Berlusconi, speaking Italian, snapped: "Mr. Schulz, I know there is a producer in Italy who is making a film on the Nazi concentration camps. I will suggest you for the role of 'kapo.' You'd be perfect."

"Kapo," which is pronounced differently than "capo," is a German word for a privileged prisoner who guards other prisoners; the word is usually associated with Nazi concentration camps. Among Italians on Wednesday, the word was commonly understood to mean a camp commander.

The remark provoked outrage around the 626-seat EU assembly, and Berlusconi was drowned out by jeering, shouting and banging of desks.

Parliament President Pat Cox called on Berlusconi to withdraw his comment. When he refused, Cox closed the debate. Cox, who is Irish, said the Italian's comments caused "a sense of great offense."

In Berlin, German Chancellor Gerhard Schroeder's office summoned Italy's ambassador and complained that Berlusconi's remarks were "unacceptable."

Responding, the Italian Foreign Ministry summoned the German ambassador to Rome, Klaus Neubert, to say Schulz's comments "constituted a grave, unacceptable offense to the dignity" of Berlusconi and all Italian and European institutions, a ministry statement said.

But Foreign Ministry undersecretary Giuseppe Baldocci also told Neubert that Berlusconi's comments "certainly weren't intended to offend the German people or hurt their sensibility," and that the prime minister "was sorry that his response was interpreted differently by some."

At a news conference, Berlusconi insisted his comment was meant as a joke inspired by the German legislator's "tone and gestures."

"My joke wasn't meant to be offensive," Berlusconi said. "It was an ironic joke, perhaps the translation wasn't done in an ironic sense."

Olaf Scholz, the secretary-general of Schroeder's party, dismissed the explanation.

"In relation to the countless people who fell victim to the dictatorship of the National Socialists, including many Social Democrats, there can be no irony," Scholz said.

The flap overshadowed Berlusconi's speech, in which he called for closer ties to Washington and pledged to complete negotiations on the first constitution for an expanded EU, which grows from 15 to 25 members next year.

Instead, Berlusconi's comment drew attention to his wheeler-dealer image and allegations by critics he is unfit to represent Europe.

Berlusconi controls a $7.8 billion media empire that includes the nation's largest private television broadcaster, Mediaset. Together with state-run RAI, he controls about 90 percent of Italy's television market, leading to charges that he has too much influence over information that can be used for political and personal gains.

Monica Frassoni, a Belgian who is the Green Party's leader in the EU, likened Berlusconi to Attila the Hun, whose barbarian hordes ravished Europe in the 5th century.

During Italy's presidency, Berlusconi will play a high-profile role in international politics, chairing major EU meetings, conferring with President Bush and other global leaders and leading EU diplomacy concerning the Middle East, North Korea and relations with Russia.

The London newspaper The Independent called Berlusconi's new EU role "an affront to the liberal democratic values of the European Union." The newspaper said Berlusconi's speeches have "a historical resonance with Italy's fascist and imperialist past."

After the Sept. 11 attacks, Berlusconi told reporters in Berlin that Western civilization was superior to Islam. He also broke with EU colleagues by suggesting that Russia and Israel might someday join the EU.

His coalition ally, Umberto Bossi, stirred his own controversy last month when he reportedly told the newspaper Corriere della Sera that Italian naval vessels should fire on ships carrying illegal immigrants.

The concentration camp flap occurred as Berlusconi sought to counter the barrage of criticism.

"Respectability is not our problem, because we have it in abundance," he wrote in an article published Wednesday in several European newspapers. "No one is in a position to give lessons in morality to a government elected by the Italians."

But the Nazi comment drew criticism even from within his own Cabinet.

"I don't share the stubbornness with which Premier Berlusconi has defended his words," Deputy Prime Minister Gianfranco Fini said. "It would have been better to apologize."

Fini, who sat next to Berlusconi during the debate, said Schulz had provoked the prime minister, but added, "no accusation, however factious, can justify the epithet of Nazi commander for a political opponent."

Enrique Baron, socialist leader in the European Parliament, said Berlusconi's comments were "outrageous and intolerable."