you need to first create the post and get the id:
$postit = array(
'post_title' => $itemtitle,
'post_content' => '',
'post_status' => 'publish',
'post_type' => 'items',
'post_author' => $user_ID,
'tags_input' => $the_post_id
);
$the_post_idit = wp_insert_post( $postit);
Once you have the post id you can use
update_post_meta( $the_post_idit,'_thumbnail_id',$itemimage);
just make sure that $itemimage holds the attachment ID.