Benetton has been forced to pull an advertisement featuring a fake picture of Pope Benedict XVI kissing a top Egyptian imam on the lips.
The image showed a likeness of the pontiff kissing Sheik Ahmed el Tayeb, an imam from Cairo's al Azhar institute - a theological school of Sunni Islam.
Al Azhar suspended interfaith talks with the Vatican earlier this year after Pope Benedict called for greater protections for Egypt's minority Christians.
The picture was posted on the clothing company's website and posters featuring the kiss were briefly displayed in Milan, New York, Paris, Tel Aviv and Rome.
It was among various fake pictures of political opponents kissing created for Benetton's campaign, titled "Unhate".
They included Barack Obama and Venezuelan leader Hugo Chavez, German Chancellor Angela Merkel and French President Nicolas Sarkozy, and the Israeli and Palestinian leaders Benjamin Netanyahu and Mahmoud Abbas.
The company said the adverts were aimed at fostering tolerance and "global love" but it prompted a quick reaction from the Vatican.
Spokesman Reverend Federico Lombardi called the picture an "unacceptable" manipulation of the Pope's likeness and said it offended the religious sentiments of the faithful.
"It shows a serious lack of respect for the Pope," he said, and he warned that the Vatican was studying measures to protect the pontiff's image.
Shock adverts have long been part of the Benetton's publicity strategy, with previous campaigns featuring death row inmates and people dying of aids.
The company said the images were "symbolic images of reconciliation - with a touch of ironic hope and constructive provocation - to stimulate reflection on how politics, faith and ideas, when they are divergent and mutually opposed, must still lead to dialogue and mediation".
In a statement following the Vatican's complaint, it apologised and said: "We have decided with immediate effect to withdraw this image from every publication."