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Create a spacious Mediterranean-themed living room featuring whitewashed walls adorned with colorful ceramic tiles, terracotta flooring, and large arched windows draped with breezy linen curtains. In the center, place a cozy, sunken seating area with a weathered wooden coffee table surrounded by plush, upholstered sofas in earthy tones. Add lush potted plants like olive trees and cacti, and include decorative elements such as woven baskets, handmade pottery, and vibrant patterned textiles. A rustic stone fireplace can serve as a focal point, and accent the room with wrought iron light fixtures for an inviting ambiance.