I have been issued a multiple-entry Schengen visa from the Italian consulate, is it possible to do transit in Holland for 2 hours as I am traveling on KLM?
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Do you mean a “multiple entry visa”? – Relaxed Jan 21 '15 at 13:12
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Yes, you can transit in Amsterdam.
Transiting in other Schengen countries is almost always possible with any visa or residence permit from a Schengen country (the only exceptions I am aware of are things like “limited territorial validity” visas and some documents given to asylum seekers).
You will in fact enter the Schengen area in Amsterdam and have your passport stamped there (your visa must therefore already be valid at this time).
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