Berlusconi, amid sex scandal, attends Vatican pact ceremony (VIDEO)

Silvio Berlusconi, engulfed in a prostitution scandal, mingled with the Vatican's No 2. official Friday at an annual celebration of the 1929 treaty that governs relations between Italy and the Vatican.

Berlusconi and Cardinal Tarcisio Bertone, the Vatican's secretary of state, led respective delegations at the ceremony to mark the anniversary of the Lateran Pacts.

The Italian prime minister has come under criticism from the Catholic church over the scandal centering on his alleged encounters with a 17-year-old Moroccan girl. Berlusconi, 74, was indicted Monday on charges he paid for sex with the girl, and then abused his influence to cover it up.

Pope Benedict XVI last month said public officials must offer a strong moral example, his first apparent comment on the scandal engulfing Berlusconi.

"Society and public institutions must rediscover their soul, their moral and spiritual roots," Pope Benedict XVI said in front of an audience of police chiefs in the capital, Rome.

Days later, Italy's top bishop, Cardinal Angelo Bagnasco joined in criticism of the "moral malaise" sweeping the country.

Bagnasco, president of the Italian Bishops Conference, said that the political quagmire was sowing the seeds of an "anthropological disaster," where the young see easy money, moral compromise and selling oneself as the road to success.

The country, he said in a speech, was drifting from "one abnormal situation to the other" as the public remained "horrified" by the acts of politicians and suffering from "moral malaise."

"Whoever accepts a public position must understand the sobriety, personal discipline, sense of measure and honor that come with it," he said.

Berlusconi, in his first public comments since he was indicted Monday, said on Wednesday that he was not worried by the impending prostitution trial.

Meanwhile, a new report indicated that Berlusconi was aware Karima al-Mahroug, the girl he allegedly paid for sex, was underage. Prostitution is legal in Italy, but sex with girls younger than 18 is not.