Reese Witherspoon & Jim Toth: Wining and Dining in Italy

By Aaron Parsley

07/29/2011 at 05:00 PM EDT

Reese Witherspoon and Jim Toth have left Paris behind – but their honeymoon isn't over yet.

The newlyweds arrived Thursday in Positano, Italy, a seaside town on the Amalfi coast, where they were spotted enjoying a romantic dinner at La Caravella, a popular eatery.

"They held hands and spoon-fed each other," an observer tells PEOPLE. "Lovebirds – that's how I would describe them."

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According to the restaurant's owner, "Mrs. Witherspoon ordered lemon leaf stuffed with fennel shredded fish, grilled and served with fennel, homemade cutlet pasta with ricotta cheese, buffalo ricotta cheese and pear with Aglianico wine and raw squids."

And to wash it down, "the pair drank a very serious wine," the owner says, "the type that only connoisseurs would order."

Before their meal, the honeymooners worked up an appetite by shopping and hopping on a boat ride out to sea to take in the breathtaking views of picturesque Positano.