This almost looks like an illustration from an old Grimm's fairy tale book
I like their very happy new year! Lovely picture too.
Vittorio Emanuele was king of Italy, and Libya was once a colony of Italy, so I vote for Tripoli, Libya. http://www.panoramio.com/photo/14662438
my first thought was Libya, for the same reasons, then I was watching the news and realised there was a Tripoli in Lebanon too, (though I would then expect the language to be French). I was googling the other day, found a postcard of the street (on ebay) sent to Italy and thought to myself that proves Libya, until I looked at the reverse and the stamps were 'Libane' which is Lebanon. So I became more unsure . . .
thanks for the link
It is confusing indeed!