Friend confused Rome and another Italian city (7)
I believe the answer is:
palermo
'italian city' is the definition.
(I've seen this before)
'friend confused rome' is the wordplay.
'friend' becomes 'pal' (pal is a kind of friend).
'confused' is an anagram indicator.
'rome' with letters rearranged gives 'ermo'.
'pal'+'ermo'='PALERMO'
'and another' is the link.
(Other definitions for palermo that I've seen before include "Italian capital" , "Sicilian city" , "Capital city of Sicily" , "Chief port of Sicily" , "Sicilian port" .)