The 2012 European Championship is in full swing and Arsenal.com will be keeping you regularly updated with the progress of the Gunners taking part in the tournament.
Roy Hodgson's side clung on for a 0-0 draw after extra time and had the edge in the shoot-out when Riccardo Montolivio fired wide. But Ashley Young hit the crossbar and Gianluigi Buffon saved from Ashley Cole before Alessandro Diamanti rolled in the decisive penalty.
Oxlade-Chamberlain was an unused substitute but Walcott came off the bench on the hour mark. He looked a threat when England broke, sending in one cross that was almost converted by Young.
Earlier, an entertaining quarter-final nearly began with one of the goals of the tournament but Daniele de Rossi's first-time effort from outside the box crashed off Joe Hart's right-hand post.
England squandered an early chance of their own when Glen Johnson rounded off a move he had instigated with a close-range shot that forced Buffon into a fine save.
Wayne Rooney and Danny Welbeck also went close for England in the first half but Mario Balotelli had three clear sights of goal - and failed to convert any of them.
The trend for missed chances continued into the second half as De Rossi fired wide from six yards and Montolivio shot over after Hart had denied Balotelli.
By now Italy had a stranglehold on the match with Andrea Pirlo pulling the strings in midfield. But for all their possession they could not find a way through as the tie went into extra time.
Diamanti hit the post with an intended cross and Antonio Nocerino had a header ruled out for offside. But both made amends in the penalty shoot-out as Italy advanced to a semi-final against Germany.