A tight match was decided by a penalty shootout, which Italy 3-2 edged thanks to a string of saves from Gianluigi Buffon.
Look back at a positive display from Cesare Prandelli's side with Sports Mole's minute-by-minute commentary below.
4.33pmAfternoon international football fans. A thoroughly entertaining Confederations Cup concludes later today when Spain and hosts Brazil contest the final. First up though the formality of a clash between unlucky losers Uruguay and Italy, with pride and third place on the line.
4.36pmBoth Uruguay and Italy can feel genuinely aggrieved that they missed out on a place in the final, with their consolation prize a final match of the season in Salvador. The Azzurri were just edged by Spain on Wednesday after a dramatic penalty shootout, while Uruguay lost out to a last-gasp strike against Brazil in their semi-final.
4.39pmItaly in particular can take heart from their spirited display against Spain, which saw Pradelii's side dominate early on as a pressing gameplan working to perfection. Ultimately the Azzurri paid for not taking their early chances though, with Leonardo Bonucci the only player to miss from the spot as Spain survived a stern test of their credentials.
4.42pmUruguay should also be encouraged by their efforts against Brazil earlier this week despite their late 2-1 defeat. Oscar Tabarez's side produced by far their best performance of the tournament and deserved to equalise against the hosts through Edinson Cavani. Diego Forlans's early penalty miss proved costly as Uruguayan hearts were broken in the closing stages, thanks to a header from Paulinho.
4.45pmTEAM NEWS! Both sides have definitely taken this game seriously if their starting XI's are anything to go by. Uruguay are pretty much at full strength, while Italy boss Prandelli takes the chance to give Stephan El Shaarawy his first start of the tournament in attack. A full look at both sides will follow in just a few moments.
4.49pmITALY: Buffon; Maggio, Chiellini, Astori, De Sciglio, Candreva, De Rossi, Montolivo, Diamanti, El Shaarawy, Gilardino
4.51pmThat Uruguay starting 11 is just about the strongest available to Tavarez, who brings Inter Milan midfielder Walter Gargano into his side. The terrific trio of Luis Suarez, Forlan and Cavani all continue in attack, with Tabarez still searching for the best way to integrate all three into his team.
4.57pmThankfully for the Azzurri Alberto Gilardino has been declared fit to continue in attack, with the veteran partnered by Stephan El Shaarawy. The AC Milan forward finally gets a chance to shine for his country this afternoon, after being kept in reserve with concerns over form and fitness.
4.59pmPREDICTION! With the Italian national anthem well underway there is just time for me to hazard a guess at who will secure third place. Uruguay are at full strength today and I think they can take advantage of an Italian squad stretched to the limit by securing a morale-boosting 2-1 win, with Cavani to get on the scoresheet once again.
2 minWith no less than eight players in the Uruguay squad playing their club football in Italy expect familiarity to breed contempt this afternoon. Italy kickoff in a changed all-white strip, shooting from left to right.
4 minAn early ball over the top from Montolivo nearly finds Gilardino, but Muslera is quick off his line to cut out the danger. The Azzurri have switched to a 4-3-3 formation this afternoon, with Maggio dropping slightly deeper to play at full-back.
6 minUruguay have settled into an early spell of possession, with Forlan dropping deep to collect the ball on more than one occasion. In hot and humid conditions the match has started at a fairly slow pace, with Cavani just failing to meet a flash across from Forlan.
9 minYELLOW CARD! Cavani and Suarez come close to combining just outside the penalty area for Uruguay, with Chiellini scrambling to apply pressure and help Italy escape danger. At the other end Pereira bundles De Sciglio to the floor with a stupid late challenge, and is rewarded with an early caution.
12 minFrom a clever whipped free kick by Diamani the Azzurri create their first meaningful effort at goal. Chiellini read the cross and flashed his header across goal unmarked, but could not direct the ball to a teammate at the far post. Uruguay had all 10 outfield players back to defend that set-piece, but still failed to pick up the Juve defender.
15 minSHOT! Uruguay are awarded a free-kick just outside the penalty area as Astori fails to get the ball in a late lunge on Cavani. After considerable deliberation Forlan pulls rank over Suarez to take the free kick, launching a low strike towards the goal that is comfortably saved by Buffon.
18 minA precise passing move sees Italy break clear in the penalty area. De Rossi burst forward before finding De Sciglio out wide. The full-back's quick cross found a clever late run from Candreva, but his shot at goal just lacked the power to beat Muslera from close range. The Lazio midfielder was superb against Spain and looks a willing runner once more this afternoon.
21 minDiamanti is allowed to turn and shoot from 25 yards, sending a scuffed low effort well wide of the near post. Muslera looks set to be busy in his 50th international appearance, with Suarez unable to beat Astori after controlling his long punt forward from a goal kick.
24 minA driving run from central midfield sees De Rossi beat two players before finding Candreva. With little to aim for in the penalty area he decides to shoot, smashing over the crossbar from 30 yards. Soon after the early duel between Suarez and Astori continues, with the forward coming off second best and requiring treatment after a knock to the head.
28 minItaly have broken the deadlock in quite bizarre circumstances. A free kick taken from out wide by Diamanti comes crashing back off the crossbar, bouncing off goalkeeper Muslera's head and into an empty net. Astori did his best to claim after a late touch on the line, but that has to go down as an own goal. The Azzurri players are congratulating Diamanti, and why not after a terrific curling cross into the penalty area.
31 minUrugay come close to almost instant response through Suarez, who attempts to catch Buffon out from a tight angle. His quick, instinctive effort is heading just inside the near post, but a strong arm from Buffon averts danger and forces Uruguay to settle for a corner kick.
34 minThe Sky Blues are temporarily down to 10 men as Caceres gets treatment for a bleeding cut, sustained in an aerial tussle inside the penalty area. Uruguay continue to attack regardless through Forlan, who keeps Buffon busy with a central strike from range.
37 minCavani quickly turns from celebration to anger as his header finds the back of the net, only to ruled out for offside. Italy are quick to break at the other end, with a neat exchange between Gilardino and El Shaarawy forcing Muslera to turn the Milan striker's shot round the post. There are definitely more goals in this game, quite possibly at both ends.
40 minSAVE! Buffon dives low to stop Maxi Pereira's scuffed effort from creeping inside the near post, with Astori and Montolivo just escaping unpunished after conceding possession in their own half.
42 minCavani's teasing ball into the penalty area comes within inches of finding Forlan, only to smashed clear by a covering challenge from Chiellini. At the other end El Shaarawy looks destined to score after finding space inside the penalty area, but his low effort is blocked away by Godin.
44 minUruguay have just had a huge penalty appeal turned away by the Algerian official. Chiellini was caught off balance by a high bouncing ball in the area and appeared to control with his hand, but furious claims from Cavani, Forlan and Suarez fell on deaf ears.
45 min+1Diamanti uses clever movement to find space in the final third, twisting and turning before firing wide from 25 yards. Maggio and Montolivo then combine to switch play with precision on the right flank, but De Rossi decides to play it safe and return to Buffon under pressure.
5.52pmA fun first half in keeping with the competitive spirit of the tournament has Italy just ahead. Quite who will be officially awarded with the opening goal is still open to debate, with Diamanti and Astori both hoping to get the nod. I still think Muslera ultimately diverted the ball towards goal with his final touch though, meaning the Uruguay keeper is likely to be credited with an own goal.
5.55pmItaly have just about shaded a tight encounter so far, with Diamanti, Candreva and De Rossi helping the Azzurri pass efficiently to dictate the match from midfield. Uruguay have largely been restricted to shots from range, with Suarez and Pereira both testing Buffon just before the break.
5.58pmA few of Prandelli's fringe players have been handed the chance to impress this afternoon, with relative success so far. Astori has looked strong in the tackle alongside Chiellini in central defence, while Diamanti has persistently found space in the final third. El Shaarawy has been quiet in attack though, largely failing to put his mark on the match.
6.01pmUruguay have failed to provide Cavani or Suarez with a killer final pass so far this afternoon. Forlan looks very comfortable with a withdrawn, deeper role but has not quite been able to link midfield and attack effectively in the first period. Width is also a problem for Tabarez, as he continues to search for the best way to incorporate three star strikers into the same system.
6.04pmBoth sides have a few options that could inject pace into the match from the bench. Expect Uruguay to introduce Abel Hernandez if they fail to find an equaliser, while Italy have the likes of Sebastian Giovinco, Claudio Marchisio and Alessio Cerci at Prandelli's disposal.
6.07pmItaly are the first side to emerge from the tunnel, for their final 45 minutes of a marathon campaign. I have received word that FIFA officials have awarded the Azzurri's opening goal to Davide Astroi after studying the video. Can't say I agree, but the defender has his first international goal.
47 minUruguay get the second half started and immediately attack through Forlan, who manages to clear the penalty area with a floated cross meant for Cavani at the far post.
50 minGodin is slightly fortunate to escape without a caution after cynically charging into Gilardino on the halfway line. His challenge does concede a free kick though, allowing Italy to build their first attack of the half through Diamanti.
53 minOnce again Uruguay's final ball is a huge disappointment as Caceres and Forlan both send successive crosses well wide of their intended destination. Cavani cuts a frustrated figure inside the penalty area, with Forlan and Suarez playing noticeably closer to the touchline in an effort to provide effective service.
56 minYELLOW CARD! Chiellini talks his way into a caution after angrily protesting his innocence to the referee following a foul on Suarez. The referee has awarded Uruguay a free kick, but first there is time for a change from Tabarez, who brings on Lazio midfielder Alvaro Gonzalez.
61 minUruguay are level thanks to a lovely finish from Cavani. The striker was found by Garagno inside the penalty area after a brilliant forward burst and made no mistake, curling home his 16th international goal past Buffon into the bottom corner. Italy were caught napping in defence there and paid a heavy price!
64 minYELLOW CARD! Suarez is next to be booked after catching Astori with a clumsy late challenge. The forward was deceived by a clever turn and dummy from the central defender, who escaped a precarious position just outside the penalty area.
67 minThat equaliser has definitely helped Uruguay left their game in the last five minutes, finding time and space inside the opposition half. Italy look a little jaded in their approach, but a superb cross from Maggio is just inches away from meeting El Shaarawy at the far post.
70 minDOUBLE SAVE! Buffon has just made two superb stops to keep Italy level. Forlan was the man who broke clear to shoot, taking advantage of a sloppy pass from De Rossi under little pressure. The striker's first effort was palmed back into play, with an instinctive shot on the rebound blocked behind for a corner kick. More evidence there of just how important Buffon is for the Azzurri, an assured last line of defence.
72 minSUBSTITUTION: Prandelli has decided to make a change with his side struggling to keep possession, swapping De Rossi for Alberto Aquilani in central midfield.
74 minQuick feet from El Shaarawy earns Italy a free kick just outside the penalty area. The forward fooled Gargano and was hacked to the ground as he attempted to fire at goal from 20 yards, giving the Azzurri a chance to test Muslera from a central position.
78 minDiamanti has just scored his first international goal in spectacular fashion. A crisp, curling free kick looked destined for the net form the moment the ball left his right foot, falling well past a beaten Muslera inside the bottom corner. A special effort from the playmaker, who is allowed a wild celebration to mark the strike.
83 minFrom around 30 yards Cavani has just produced his own moment of magic to bring Uruguay level. The forward decided to strike a free kick from range towards goal, with his fierce effort too much for Buffon as it lands in the roof of the net. Pretty sure the goalkeeper will be disappointed not to keep a fairly central strike, but take nothing away from Cavani and yet another Confederations Cup moment to remember.
85 minSUBSTITUTIONS: Candreva is next to try an outrageous strike, sending an inventive chipped effort over the crossbar from just outside the penalty area. Uruguay decide to make a change before play can continue, swapping one Pereira for another as Alvaro replaces Maxi. Italy have also replaced Diamanti for Giaccherini late in the match.
87 minYELLOW CARD! Montolivo goes into the referee's notebook after a clumsy challenge on Arevalo just beyond the halfway line, with just a few minutes remaining for either side to score a late winner.
90 min+1Aquilani's long diagonal pass just fails to find a tired Gilardino as this match heads into added time. At the other end Pereira wins a corner for Uruguay after his cross is deflected behind by Astori. The corner kick is played short for Suarez, but he is quickly closed down.
90 min+3El Shaarawy chases down a long through ball out wide and wins a free kick, with the referee deciding that Caceres failed to play the ball in a sliding challenge. A curling free kick from Candreva looks promising but contains too much power, eventually drifting well beyond a packed penalty area.
6.55pmFULL-TIME Uruguay 2-2 Italy (extra time required)
6.58pmWith the match deadlocked after 90 minutes extra time will be required in Salvador to determine which team finishes third place. A tired Italian squad could probably have done without an extra 30 minutes, with Uruguay looking slightly stronger following that stunning Cavani equaliser.
7.01pmNeither side looks in any particular rush to get extra time underway on the sideline. Tabarez has gathered his players in a circle to receive further instruction, while Prandelli prefers a more relaxed approach to proceedings.
7.03pmHere we go then, with Italy about to get their second successive match requiring extra-time back underway following a brief period of rest.
92 minCandreva threatens early in the extended period for Italy, with his pass inside the penalty area just intercepted by Lugano's well-timed lunge.
95 minItaly have settled into possession quickly since the restart, calmly keeping possession at a fairly pedestrian pace. A bright burst from Candreva fails to create a clear-cut chance though as the midfield starlet sends a scuffed cross out for a goal kick.
98 minSUBSTITUTION: After persistent problems with cramp Astori's match is over, with the young defender replaced by Leonardo Bonucci. His penalty miss ultimately saw Italy beaten by Spain on Thursday, would the Juve man step up again if asked tonight?
101 minAquilani gifts Uruguay possession with a sloppy pass inside that is intercepted quickly by Suarez. The forward jinks inside the penalty area to win a corner kick under pressure from two defender. When the corner comes in from Forlan the South Americans want a penalty kick, but the referee is not interested after deciding that Godin went down too easily in the box.
104 minSuarez is next to go down in the penalty area after controlling a precise pass from Pereira, but once again the Algerian official rejects strong claims for a spot kick. Chiellini is furious with the striker and quickly tells him to get back on his feet.
105 minA small opening for Cavani from close range is quickly cut out by Bonucci, who takes advantage of a slack touch from the forward to clear. Gonzalez is then unable to keep the ball in play after chasing down a long ball near the corner flag, with Italy unsurprisingly looking very tired as this match wears on.
7.20pmBoth sides are thankfully being allowed a short drinks break before swapping ends, with 15 minutes left for either side to force a late advantage. A few of the Azzurri players have already completed 120 minutes once this week, but the likes of Chiellini and Maggio are still going strong in Salvador.
107 minSUBSTITUTION: Uruguay have decide to make their final change early on in the second extended period, with Diego Perez replacing Arevalo to provide fresh legs in central midfield.
110 minAquilani's attempt to pick out De Sciglio is well placed but just lacks power, with Candreva following up to shoot from range. His effort bounces wide and is watched wide by Muslera, who decides not to touch the ball and concede a corner kick.
112 minRED CARD! Montolivo has been handed his matching orders, picking up a second yellow card after cynically bundling Suarez to the ground. The contact appeared to be minimal around 30 yards from goal, but Uruguay now have a man advantage and a free kick for Cavani to unleash at goal.
114 minCavani's free kick flies well over the crossbar, with Buffon taking his time before launching a long goal kick clear of his own half. Uruguay are quick to attack again through Suarez, who just misplaces a chip towards Suarez at the back post.
117 minA slick interchange between Cavani and Suarez is just cut out by Bonucci as Uruguay use their numerical advantage to put pressure on Italy. Suarez is quickly involved again as he shoots range, connecting sweetly with a strike that eventually goes sailing over Buffon's far post.
119 minTime is fading fast for Uruguay to net a late winner as Cavani pokes a wayward effort over under pressure from two defenders. Italy are then able to take a welcome break by keeping possession, before Giaccherini concedes a free kick after fouling Pereira on the halfway line.
120 minGargano has a powerful strike from distance parried clear by Buffon, with Cavani flagged for offside as he dragged the rebound wide. Suarez then decides to take on two defenders rather than pass to Perez in the penalty area, allowing Maggio to clear with a covering challege.
7.38pmAfter two hours of play in the punishing Salvador heat Uruguay and Italy are still deadlocked at 2-2. That means a second penalty shootout in four days for the Azzurri, with the winner claiming third place as a consolation prize.
7.40pmJust three of the Italy players who took against Spain are still on the pitch this evening, it will be interesting to see if Bonucci takes after missing on Wednesday. You would expect all three of Uruguay's star forwards to step up, but Forlan did miss a penalty in normal time against Brazil earlier this week.
7.42pmHere we go then with the shootout and it looks like Diego Forlan will be first to try his luck from 12 yards.
Uruguay PenaltySAVE! Forlan blasts a low strike the middle which Buffon reads easily, diving low to save with his legs.
Italy PenaltyGOAL! Aquilani shows Forlan how its done, confidently aiming a strike high into the top right corner. 1-0 to the Azzurri.
Uruguay PenaltyGOAL! Cavani responds for Uruguay, sending Buffon the wrong way with an assured low effort. 1-1 now in the shootout.
Italy PenaltyGOAL! A cooly-taken effort from El Shaarawy restores Italy's advantage, 2-1 now to Prandelli's men.
Uruguay PenaltyGOAL! Suarez makes no mistake with a measured penalty, keeping Uruguay alive at 2-2 with an effort aimed low into the corner.
Italy PenaltySAVE! De Sciglio keeps the shootout level, he looked anxious and sends a scuffed effort straight to a grateful Muslera. This is still anyone's match now.
Uruguay PenaltyMISS What an awful effort from Caceres, with a tame strike easily read by Buffon. 2-2 but Italy now hold the advantage.
Italy PenaltyGOAL! Giaccherini nudges Italy ahead, fooling Muslera with a clever strike low and hard into the corner. Gargano will be next and must score for Uruguay.
Uruguay PenaltySAVE! Gargano fails to beat Buffon and hands Italy a 3-2 win on penalties in the process.
7.51pmA small measure of redemption then for Italy, who claim third place and a confidence-boosting success on penalties. Prandelli can definitely look back on this tournament with pride, while Tabarez also has positives to take from the past fortnight.
7.54pmThat just about does it for out coverage from Salvador. Thanks for your time and be sure to check in with Sports Mole again tonight when Brazil face Spain in the Confederations Cup final. Good evening!