At least 130 people died and scores were missing after a boat carrying African migrants, mostly from Eritrea sank off the Sicilian island of Lampedusa, officials and rescuers said.
A total of 103 bodies have been recovered and more have been found inside the wreck, coast guards say.
Passengers reportedly threw themselves into the sea when a fire broke out on board. More than 150 of the migrants have been rescued.
Most of those on board were from Eritrea and Somalia, said the UN.
The boat was believed to have been carrying up to 500 people at the time and some 200 of them are unaccounted for.
Italian media reports said at least two children and a pregnant woman were among the dead.
Four coast guard and police vessels and two helicopters were in the area, and a submerged vessel of about 20 metres in length had been identified in the water after it caught fire and sank, officials said.
Transport Minister Maurizio Lupi said in a statement he was being kept constantly up to date about the situation, with the death toll expected to rise.
Coast guard official Floriana Segreto said rescue operations were continuing.
A fishing boat raised the alarm at around 7:20 am (05:20 GMT) and began pulling people out of the water before coastguard vessels arrived on the scene.
The boat sank just four days after 13 migrants drowned when their boat foundered off eastern Sicily.
Lupi said more needed to be done to combat people traffickers who coordinated the transport of migrants in crowded and unsafe vessels.
"It is a task which we have to take on and which the international community and the European community have to take on as well," Lupi said in a statement.
Thousands of desperate migrants from Africa arrive in Italy on unsafe, overcrowded vessels every year, with most coming to Lampedusa, a tiny island just 113 kilometres from the coast of Tunisia.
Lampedusa, an island closer to continental Africa than to the Italian mainland, is often the destination for boats full of migrant workers seeking entrance to the European Union.
On Monday this week, 13 would-be migrants drowned off the coast of nearby Sicily after their boat sank and they tried to swim to shore.