Yes, it's Sigonella. I remeber it, i was a boy and saw on TV
Now, you say that the American jets could not land anywhere but Sigonella. Please explain why. There were other NATO bases in the Mediterranean. They could have flown to Turkey and direct the plane there, just to say one. A fly from Egypt to Tunisia (the intended destination of the hijackers) is longer that a fly to Turkey, so fuel wasn't a problem.
About the jurisdiction issue, i have the impression that you're confusing things a little, and forgive me if i'm wrong. Just in case, let's try to clarify things.
Guantanamo Bay. Have you ever wondered why the Americans have been able to mantain a military base in a country that has been so long a strong ally of the Soviets? Why didn't Cuba, or the Soviets, kick the Americans offshore? The answer is simple: Guantanamo was
sovereign USA territory. Cuba or USSR couldn't lead away the american forces without committing an act of war. The consequences are easy to figure out.
OTOH, Sigonella wasn't American soil. It was (and still is!) under Italian sovereignity. Now, being it a NATO base, it wasn't exactly as a common Italian soil either. In such a case, there are precise international agreements between the involved countries dealing with problems, jurisdition conflict etc. The details of such an agreement are beyond my knowledge, but i can suppose that an incident like the one we're arguing about wasn't clearly covered by the agreement. And so, both the American forces and the Italian government acted in the way they thought to be the right one.
At the end, unwilling to trigger an international incident, the USA forces agreed to recognize the Italian sovereignity and let the italian Carabinieri (which also have functions of Military Police, so they had every right to stay there) take control of the plane.
I'm not saying that Italy acted in the best way it could. Probably the matter could have been handled better, while staying in full respect of the Italian law. Honestly, can't say it. But the first to screw up were surely the American, as they did often even in present days
What i can state for sure is that Craxi didn't want to embarass America. He did what he thought it was the right thing to do. Please note that in 1985 the Soviets were still a menace. There were still Soviet SS-20 aimed at the main european cities, and in such a scenario, the alliance wasn't under questioning at all.