The 111 coffins were numbered, a teddy bear wearing a smile and a blue shirt with a heart was placed above casket No 92.
The ceremony took place hours after Italian fishermen threw a bouquet of yellow flowers near the exact spot where the migrant boat sank, honking their foghorns in tribute to the dead and up to 250 migrants who may still be missing.
A parliamentary delegation visited the survivors amid reports that a boat may have violated the "law of the sea" by failing to help the migrant ship packed with 500 migrants, nearly all from Eritrea, about 600 meters (650 yards) from shore.
"To come to rescue is a duty. Not to come to rescue is a crime," Laura Boldrini, the Italian house speaker who previously and for many years was the UN Refugee Agency spokeswoman in Italy, told reporters in Lampedusa after visiting the survivors.
Instead, at least 111 drowned and 155 survived, some of whom were in the water for three hours, clinging to anything buoyant, even empty water bottles.
Boat captains in Italian waters have been dissuaded in the past from helping migrants in distress because they fear prosecution under an Italian law aimed at curbing illegal migration. But Boldrini said the law of the sea requires assistance to be given to anyone in need.
Italian lawmaker Pia Locatelli, part of the delegation, told The Associated Press the migrants reported that a boat circled them with a light and then went away. They also saw one or perhaps two more boats in the distance before the fire.
"They were absolutely sure in telling the boat went around their own boat," Locatelli said, but they were unable to offer a further description.
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