Rt Rev Giovanni D'Ercloe of Ascoli Piceno said he found the cross that was inside the building still intact.
Rescue crews in the area are racing against time in the search for survivors of the huge earthquake which levelled three towns.
The death toll is at least 250.
Aided by sniffer dogs and audio equipment, rescuers worked through the night, using their bare hands to pull chunks of cement, rock and metal apart from mounds of rubble, looking for signs of life.
Bishop D'Ercole said the scene was "distressing" and that the towns are in a "desperate situation".
Speaking to Vatican Radio from Pescara del Tronto, one of the towns affected, he said: "When I arrived at the break of day, I saw a destroyed village, screams, death.
"We are truly in a desperate situation and unfortunately this is not the only area affected, because others are also in this situation.
"There are several people who are not responding [to telephone calls], and I went to bless the bodies of two children buried under the rubble."
He added that some of the victims lived there but many of the young people who died were on holiday.
"I met them on Friday when I celebrated the last Mass," he said, "and then everything collapsed".
"Yesterday I used my bare hands to dig through the ruins of the church to find the cross," he added.
Sister Mariana, one of three nuns and an elderly woman who survived the quake that flattened half of her convent in Amatrice said: "From here everyone survived.
"They saved each other, they took their hands even while it was falling apart, and they ran, and they survived."
She said others from another part of the convent apparently did not make it - three other nuns and four elderly women.
Prime Minister Matteo Renzi, visiting the quake-affected area on Wednesday, promised to rebuild "and guarantee a reconstruction that will allow residents to live in these communities, to relaunch these beautiful towns that have a wonderful past that will never end".
While the government is already looking ahead to reconstruction, rescue workers on the ground still had days and weeks of work ahead of them.