Silvio Berlusconi, Italy’s former prime minister, has triggered outrage with comments defending fascist wartime leader Benito Mussolini at a ceremony commemorating victims of the Nazi Holocaust.

Speaking at the margins of the event in Milan on Sunday, Berlusconi said Mussolini had been wrong to follow Nazi Germany's lead in passing anti-Jewish laws but that he had in other respects been a good leader.

"It's difficult now to put yourself in the shoes of people who were making decisions at that time," said Berlusconi, who is campaigning for next month's election at the head of a coalition that includes far-right politicians whose roots go back to Italy's old fascist party.

"Obviously the government of that time, out of fear that German power might lead to complete victory, preferred to ally itself with Hitler's Germany rather than opposing it," he said.

"As part of this alliance, there were impositions, including combatting and exterminating Jews," he told reporters.

"The racial laws were the worst fault of Mussolini as a leader, who in so many other ways did well," he said, referring to laws passed by Mussolini's fascist government in 1938.

Although Mussolini is known outside Italy mostly for the alliance with Nazi Germany, his government also paid for major infrastructure projects as well as welfare for supporters.

Berlusconi's comments overshadowed Sunday's commemoration of thousands of Jews and others deported from Italy to the Nazi death camps of eastern Europe.

They were condemned as "disgusting" by the centre-left Democratic Party (PD), which is leading in the polls ahead of the Feb. 24-25 election.

"Our republic is based on the struggle against Nazi fascism and these are intolerable remarks which are incompatible with leadership of democratic political forces," said Marco Meloni, the PD's spokesman for institutional affairs.

Antonio Ingroia, a former anti-mafia magistrate campaigning at the head of a separate left-wing coalition, said Berlusconi was "a disgrace to Italy".