Relations immediately after the end of World War I, and shortly before the rise of fascism in Italy, were severely affected and constantly tense due to the dispute over Dalmatia and the city-port of Fiume (Rijeka).

Relations during the interwar years were hostile because of Italian demands for Yugoslav territory, contributing to decision by Italy and Germany to invade Yugoslavia during World War II.

According to the pact, Italy was to declare war against the Triple Alliance; in exchange, she was to receive the Julian March, northern Dalmatia and the protectorate over Albania.

In November 1918, after the surrender of Austria-Hungary following the Armistice of Villa Giusti, Italy occupied militarily the Julian March, Istria, the Kvarner Gulf and Dalmatia, all Austro-Hungarian territories.

Italy received only the Julian March, the Dalmatian city of Zara (Zadar), as well as the islands of Cherso (Cres), Lussino (Lošinj) and Lagosta (Lastovo).

A large number of Dalmatian Italians, (allegedly nearly 20,000), moved from the areas of Dalmatia assigned to Yugoslavia and resettled in Italy (mainly in Zara).

[2] Relations seemed to settle with the signing of the Treaty of Rapallo, the annexation by Italy of the Free State of Fiume and the evacuation of the Governorate of Dalmatia.

Relations with the Kingdom of Yugoslavia were severely affected and constantly remained tense, because of the dispute over Dalmatia and over the city-port of Fiume (Rijeka).

He was creating a difference towards Serbia in which "Italy will always have [a] friendly policy but with Yugoslavia she will have [a] good relationship only if she accept[s] that her destiny is [in the] Aegean and not [the] Adriatic Sea".

During this time the first contact between Ante Pavelić (who wanted Italian help for the destruction of Yugoslavia) and the creation of an independent Croatia with official representatives from Italy.

The following year she allowed Ante Pavelić to live in Italy where he organized the Ustaše (a Croatian fascist anti-Yugoslav movement).

To put more pressure on Belgrade, Mussolini made a few speeches with the words "Dalmazia o morte" (Dalmatia or death);[6] but the real demand was that Yugoslavia accept Italian supremacy in Albania.

Italy was criticised for helping and financing them, sending all members to closed training camps where they received Italian support and control.

An agreement was also signed settling all border issues, while Italy provided information to Yugoslavia about the identities and place of residence for 510 Ustaše members.

Italy recalled General Gastone Gambara from Spain in 1940 so that he could take control of forces which would attack Banovina of Croatia (a Yugoslav province).

Italy created plans of attack on Yugoslavia in February 1940 with the primary objective of taking Šibenik, Split and Kotor so that the Adriatic situation would be eased.

Hitler ordered an attack on Yugoslavia following the coup d'état on 27 March; two days later the new Yugoslav prime minister, Dušan Simović, asked for Italian help in restoring relations with Germany.

The invasion ended with the unconditional surrender of the Royal Yugoslav Army on 17 April 1941, the annexation and occupation of the region by the Axis powers and the creation of the Independent State of Croatia (Nezavisna Država Hrvatska, or NDH).

When the Fascist regime collapsed in 1943 and Italy capitulated, its eastern border territory was occupied by German forces, the authority of the Italian Social Republic in this zone being largely theoretical.

"[22] At the end of World War II the former Italian territories in Istria and Dalmatia became part of the Socialist Federal Republic of Yugoslavia by the Paris Peace Treaty (1947), the only exception being the communes of Muggia and San Dorligo della Valle.

The Socialist Federal Republic of Yugoslavia was one of only two European countries that were liberated by its own forces during World War II, with limited assistance and participation by the Allies.

In 1947–1948, the Soviet Union attempted to command obedience from Yugoslavia, primarily on issues of foreign policy, which resulted in the Tito–Stalin split and almost ignited an armed conflict.

A period of very cool relations with the Soviet Union followed, during which the US and the UK considered persuading Yugoslavia into the newly formed NATO.

This ambivalent position at the start of the Cold War matured into the non-aligned foreign policy which Yugoslavia actively espoused until its dissolution.

In this short time frame, Italy mainly backed its allies' moves in the Yugoslav crisis, such as the February 1991 German initiative, US-inspired, of threatening economic isolation of Yugoslavia in the lack of multi-party elections.