Lateran Palace Introduction: The Lateran Palace (Palazzo del Laterano) is adjacent to the Cathedral. It was once the official residence of the Pope and is now the office of the Diocese of Rome. On February 11, 1929, Mussolini, who was in power in Italy, and representatives of Pope Pius XI signed a treaty in the Lateran Palace, stipulating the mutual relationship between the Italian state, the Pope, and the Holy See: the Holy See recognized the Italian state and the capital of Rome. status, Italy recognizes the authority of the Pope and the Holy See’s sovereignty over the Vatican. The Pope has secular governance rights, diplomatic rights, and the right to communicate freely with foreign countries. At the same time, it has extraterritorial and tax-free rights over the Lateran Palace and more than a dozen church buildings. Italy gives the Holy See A compensation payment. This is the beginning of the Vatican as a sovereign state and is of great historical significance.