ROME, July 24 (UPI) -- The Catholic Church is reeling from a new scandal over an Italian magazine article with photographs of priests visiting gay bars and having sex, observers said.

The weekly magazine Panorama, owned by Prime Minister Silvio Berlusconi, used hidden cameras to capture priests visiting gay bars and clubs in Rome and engaging in sex, Britain's The Guardian reported Saturday.

The diocese of Rome lashed out at the prime minister's magazine, saying its aim was "to create scandal 1/8and3/8 defame all priests."

The Vatican does not condemn homosexuals but considers gay sex "intrinsically disordered," and one of Pope Benedict's earliest actions was to bar actively gay men from studying for the priesthood, the Guardian said.

The diocese, in a statement, urged gay clerics to leave both the closet and the priesthood.

"Consistency would require that they come into the open," the dioceses said, but that they "ought not to have become priests."

One gay activist said gay priests leaving the church would have a serious impact.

"If all the gays in the Catholic Church were to leave it at once -- something we would very much like -- they would cause it serious operational problems," former Italian MP and activist Franco Grillini said.