Old man is an old friend (7)
I believe the answer is:
paisano
'friend' is the definition.
(I have seen 'American friend' mean 'paisano' so perhaps 'friend' could also mean 'paisano')
'old man is an old' is the wordplay.
'old man' becomes 'pa' (both can mean someone's father).
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'pa'+'is'+'an'+'o'='PAISANO'
(Other definitions for paisano that I've seen before include "buddy" , "American friend" .)