Around 35% of Italians thought they lived in an area that is at high or medium risk of crime.
But although bag snatching and robbery are at the highest rate in 50 years, the report noted that the number of other offences have decreased.
''In reality, since the beginning of the '90s many types of crime such as car theft have registered a decrease. Murders have also dropped,'' Istat said.
''The perception of crime rates relies more on the widespread nature and visibility of crimes than on their seriousness''.
The report pointed out that there was a strong link between Italians' growing sense of insecurity and the increase in the number of immigrants living in
Recent polls have also shown that the majority of Italians support a government crackdown on crimes committed by foreigners announced by Interior Minister Roberto Maroni earlier this month.
The Istat report confirmed a growing trend in immigrant crime, with some 100,000 immigrants booked in 2007.
While bag snatching was the most popular immigrant crime with 70% of offences committed by foreigners, immigrants were also responsible for around 33% of violent crimes committed in 2007, the report said.
But while the number of murders committed by immigrants rose by 26% between 1992 and 2006, the report showed that in many cases the victim of the crime was also an immigrant.
''Often the victim and the murderer are of the same nationality: it seems that the growth of homicides that involve foreigners is connected more to issues within the group rather than Italian society as a whole,'' Istat said.
The report also stressed that almost all immigrant crime in the country is committed by foreigners who do not have a residence permit.
Of regular immigrants who have the necessary paperwork, only 6% were responsible for crimes in 2007 - around the same percentage as the Italian population.
Under the government's new security package, convicted foreigners who receive a jail term of two years or more will automatically be expelled and irregular migrants who commit an offence will see their sentence increased by a third.
Illegal immigration will also be considered a crime, and landlords who rent to illegal aliens will receive sentences of up to three years.
According to the Istat report, there are around 3.5 million foreigners living in
Albanians, Moroccans and Romanians form the largest foreign communities in the country, while