A 2-1 defeat at the hands of Croatia meant defending champions Spain failed to top Group D and will now face Italy in their first knockout game while the Croats will tackle Portugal.
It is a repeat of the Euro 2012 final that saw Spain comfortably win 4-0 thanks to goals from David Silva, Jordi Alba, Fernando Torres and Juan Mata.
But despite defeat to Ireland on Wednesday night, Italy have impressed this tournament with wins over Belgium and Sweden and Barcelona star Iniesta says he has seen the Azzurri make great strides in recent weeks.
"They're a powerful rival, a difficult rival, and a good game," he said. "It's a game that will be useful to us, if we are to keep developing and taking steps in these Euros.
"Aside from the final four years ago, all of our games have been very closely fought out. Italy have excellent players, and a great defensive block we've known for a long time.
"Contrary to what I hear people saying, they also improved a great deal in terms of possession and ball-handling.
"They really stepped up, which makes the game on Monday even more complex and our aspirations even more difficult.
"This is how things went, we lost and now we've got to deal with Italy. We must face this situation with the appropriate confidence, because I believe that if we play at our level then we have some good chances of passing."
Source: Sportsbeat
