Italy's coastguard, which was coordinating the search for survivors and bodies, said only 28 people had survived a wreck that triggered fresh calls from Pope Francis and others for European leaders to act over what many saw as an avoidable tragedy.
Survivors' testimonies suggested there had been about 700 people on board the 20-metre (70-foot) fishing boat when it keeled over in darkness overnight, officials said.
As Italy demanded an emergency summit of European Union leaders, talks at the level of foreign ministers were scheduled for tomorrow to discuss what Amnesty International blasted as a predictable "man-made tragedy".
Coastal authorities in Italy and Malta picked up a distress signal from the stricken vessel around midnight (2200 GMT) on yesterday, when it was about 70 miles (126 km) off the Libyan coast.
The Italian coastguard instructed a nearby merchant ship to provide assistance and it was when the Portuguese-registered King Jacob arrived at the scene that the fishing boat capsized, most likely as a result of the terrified passengers stampeding to one side in their desperation to get off, the UNHCR's Sami said.
Italian Prime Minister Matteo Renzi said the coastguard would seek to salvage the boat and ensure any corpses recovered from it were given a decent funeral.
EU foreign policy chief Federica Mogherini, a former Italian foreign minister, said today's events were a stain on the EU's conscience.
"We have said too many times 'never again'. Now is time for the European Union as such to tackle these tragedies without delay."
The UN High Commissioner for Refugees, Antonio Guterres, added: "This disaster confirms how urgent it is to restore a robust rescue-at-sea operation and establish credible legal avenues to reach Europe. Otherwise people seeking safety will continue to perish at sea."
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