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Venice, no doubt. It's absoultely magical. I've visited this city several times, and it's always amazing, when the sun is shining, when it's foggy, at night..doesn't matter. It has a very special atmosphere with all the canals and no cars, it's really unlike any other city. It's a very lively place...very Italian ;)
Although the old city of Prague is beautiful as well, but it's not quite the same..