Area north of Italian islet (3)
I believe the answer is:
ait
'islet' is the definition.
(both can mean a small island)
'area north of italian' is the wordplay.
'area' becomes 'a' (maths abbreviation).
'north of' says to put letters next to each other (in a down clue, some letters go above others).
'italian' becomes 'it' (abbreviation for Italian).
'a'+'it'='AIT'
(Other definitions for ait that I've seen before include "Small island in river or lake" , "isle" .)