Italian news agency Ansa has reported that two British tourists and an Israeli national were among the four people who died in the crash on Thursday, at Monte Faito in the town of Castellammare di Stabia, citing Naples mayor Gaetano Manfredi.
A traction cable snapped bringing cable cars to a halt, according to initial information.
A fifth person, believed to be a foreign tourist, was seriously injured during the incident.
A number of people had to be evacuated from another cable car.
An investigation into multiple manslaughter and culpable disaster has been opened by Italian prosecutors, according to reports.
In a translated post on social media, Vincenzo De Luca, president of Campania, called the day “truly tragic and painful” and said his thoughts go to those who died, were injured and their families.
He said he was grateful for the rescuers and said an investigation into what happened will be carried out.
Luigi Vicinanza Sindaco, the mayor of Castellammare, said on Facebook that there will be a day of mourning and decided to cancel all initiatives for the Easter holidays.
He added that a minute’s silence would be held on Friday in memory of those who died.
Firefighters, police and Italy’s alpine rescue were sent to the scene, which is between the popular tourist areas of Pompeii and Sorrento.
EAV public transport firm, which runs the cable car, said the service had reopened a week ago with all the required safety conditions.
Checks were being carried out by investigators on the cable car and the possibility that strong wind was among the causes of the incident.
Italian Prime Minister Giorgia Meloni expressed her condolences from Washington DC, where she met with US President Donald Trump.
A British tourist said she saw people being evacuated in a harness from one cable car following the incident.
Megan Pacey, 50, from London, was with her husband, James Ross, and their two children Hannah, 10, and eight-year-old son, Luke, when they saw a suspended cable car.
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She said: “We were within a minute or two of (the incident) happening.
“They started winching people down from the cable car. We watched the first couple of people come down in a harness and as we left, there was a sense of urgency that had kicked in.”
She said she saw flowers and candles on the steps outside the railway station on Friday and emergency services remained at the scene.
A Foreign, Commonwealth and Development Office spokesperson said: “We are dealing with an incident in Italy and are in contact with the local authorities. Our thoughts are with those affected.
“Our staff are available 24/7 to support British nationals abroad.”