Referred to as "Italian bacon," pancetta is an Italian charcuterie selection made from salt-cured, aged pork belly. It is not smoked like American bacon, so it has a mellower flavor and higher amount of moisture.
Unlike prosciutto — cured, Italian ham that is made from the hind leg of the pig and is often served thinly sliced and uncooked — pancetta is made from pig's belly, so it is higher in fat content. It is often cooked so its fat can be rendered to add depth to sauces, pastas, roasts, and sautés.
There are many gourmet varieties of pancetta (you can even make it yourself) but don't look for any Italian versions. They are banned from being imported into the United States. Which do you prefer? Pancetta or prosciutto?