Italy is holding a day of national mourning, after a boat carrying about 500 African migrants sank off the island of Lampedusa.
At least 103 bodies were recovered and scores more are trapped in the vessel, which sank less than 1 km (half-a-mile) offshore.
More than 150 people were rescued, but another 200 of those on board the 20m (66-ft) boat are unaccounted for.
Most of the migrants were from Eritrea and Somalia, said the UN.
The skipper of the boat, a 35-year-old Tunisian, was arrested, announced Italy's Interior Minister Angelino Alfano when he visited the island later in the day.
"He had been deported from Italy in April," Mr Alfano said.
"This is not an Italian tragedy, this is a European tragedy," he continued. "Lampedusa has to be considered the frontier of Europe, not the frontier of Italy."
A minute of silence will be observed in all Italian schools on Friday in memory of the victims.
At this time of year, when the Mediterranean tends to be calmer, boats carrying migrants from Africa and the Middle East land on Italy's southern shores almost every day, the BBC's Alan Johnston reports from Rome.
But the vessels are usually overcrowded and often unseaworthy.
Mr Alfano said the ship had sailed from Misrata in Libya and began taking on water when its motor stopped working as it neared Lampedusa early on Thursday morning.
It is thought that some of those on board set fire to a piece of material to try to attract the attention of passing ships, only to have the fire spread to the rest of the boat.
"Once the fire started, there was concern about the boat sinking and everyone moved to one side, causing the boat to go down," Mr Alfano said.
He said at least three children and two pregnant women were among the dead.
It is one of the worst such disasters to occur off the Italian coast in recent years; Prime Minister Enrico Letta tweeted that it was "an immense tragedy".
In a separate incident on Thursday, local media reported that around 200 migrants were escorted to the port of Syracuse on the island of Sicily, when their vessel encountered difficulties five miles off the coast.
Earlier this week, 13 migrants drowned while trying to reach Sicily
Footage from Lampedusa showed bodies being laid out on the dockside.
The mayor, Giusi Nicolini, described the scene as a "continuous horror".
"It's horrific, like a cemetery; they are still bringing them out," said the mayor, according to Reuters.
The search was widened later in the day beyond the initial radius of four nautical miles from Lampedusa in an effort to recover bodies that had been swept away by tides
One Eritrean woman who had been placed among the bodies recovered from the sea was later found to be breathing, Italian media said. She was taken to hospital in Sicily. But there is little hope of finding anyone else alive.
Bodies were later taken to a hangar at the island's airport, because there was no more room at the morgue.
Pope Francis sent a Twitter message calling for prayers for the "victims of the tragic shipwreck off Lampedusa". In July he visited the island and condemned the "global indifference" to the plight of migrants trying to arrive there.
In a later audience at the Vatican, he said: "The word is disgrace: This is disgrace!"
In a statement, UN High Commissioner for Refugees Antonio Guterres commended the swift action taken by the Italian coast guard to save lives.
Mr Guterres also expressed "dismay at the rising global phenomenon of migrants and people fleeing conflict or persecution and perishing at sea".
The UN said that in recent months most migrants attempting the crossing were fleeing the conflicts in Syria and the Horn of Africa, rather than coming from sub-Saharan Africa.
The number of those arriving by sea to Italy this year until 30 September stood at 30,100, according to the UN.
The main nationalities of those arriving were Syrian (7,500), Eritrean (7,500) and Somali (3,000).