Trailing by eight points at half-time, the Emus rallied with a 21-11 third quarter to take the momentum into the fourth period.

They extended the margin to seven with just over four minutes remaining, capped by a monster dunk from Jack White. However, a hot-shooting Italian side were able to re-gain the lead inside the final minute before Dejan Vasiljevic salvaged a broken offensive play, hitting a deep three-pointer to tie the match with 21 seconds remaining.

Following a well-timed foul, the Azzuri had just five seconds to conjure up a basket but the speed of Diego Flaccadori proved un-guardable as he streaked to the basket and scored just before the final siren to break the hearts of the Emus, 69-67.

"We are playing hard and doing a lot of positive things," said coach Adam Caporn.

"Unfortunately, we just haven’t been able to piece together a complete game. Credit to Italy in what was a very tough game and another battle right until the end."

On 8-14 shooting, Jack McVeigh led Australia with 18 points while Vasiljevic finished with 16 including two three-pointers. Thomas Wilson (four points, five rebounds, five assists) and William McDowell-White (four points, six rebounds, five assists) also recorded solid performances.

Click here for the box scores.

The Emus now have a day off to prepare for their final group stage match against Tunisia. That match will be available to watch via FIBA's YouTube channel with the game live at 1.15am Wednesday.

"We need to work on finding some rhythm and being more disciplined, particularly with respect to working to create good shots throughout the entire game," said Caporn.

"We absolutely have the capability to overcome our struggles offensively but we have to do it together. As a group we have a challenge on our hands, but one that we are up for and looking forward to."