Italy 1 New Zealand 1:Defending champions Italy have been held to an embarrasing draw by an extraordinarily industrious New Zealand side that could have won had young defender Tommy Smith resisted pulling the jersey of Italy midfielder Daniele De Rossi in the box.
The All Whites remain unbeaten after an opening round draw with Slovakia and will now face Paraguay with a chance to progress to the last 16 for the first time in their history in their second appearance on the biggest stage.
Italy controlled much of the possession but looked very short on ideas. They now look ahead to a meeting with a Slovakia side fighting for their lives too and elimination is a real possibility for Marcelo Lippi's aging side.
The All Whites got off to a dream start when Shane Smeltz capitalised on a Fabio Cannavaro error to prod home the opening goal in the seventh minute.
Italy then threw everything they had at New Zealand, but, despite Vincenzo Iaquinta converting a penalty just before the half-hour, couldn't find a way through an inspired Kiwi backline for a winner.
Ryan Nelsen and Winston Reid were both superb at the heart of the All Whites defence, while keeper Mark Paston was also in inspired form.
The stunning result leaves both Italy and New Zealand level on two points going into the final round of Group F fixtures.
After the game New Zealand coach Ricki Herbert said: "I think it has stopped the nation. I think it is the most incredible result we've had.
"I know it is early in the morning in New Zealand but I think there will be a lot of excitement back home.
"It's more than anything we have achieved in the history of the game. I think it will be embraced enormously."
Italy coach Marcello Lippi claimed his side did not have any luck, saying: "We're just sorry we didn't win a match we could have.
"If we didn't win against New Zealand it's our fault. Once again the opponent scored on their first chance. We were able to control the game after that, but this was a match we should have won.
"They weren't as lucid or as enterprising as they should have been.
"Again we were very unfortunate. It's not like we didn't do great things, although you always need to do more."