A major rescue operation is under way after the vessel carrying “between 500 and 700 migrants” capsized at midnight local time, south of the Italian island of Lampedusa.
So far 28 people have been rescued.
Earlier this week, four hundred people were feared to have drowned when their vessel capsized north of Libya.
Maltese Prime Minister Joseph Muscat said that many people were feared dead.
Carlotta Sami, a spokeswoman for the UN’s refugee agency, told Italian media: “At the moment, we fear that this is a tragedy of really vast proportions.”
Italian ships, the Maltese Navy and commercial vessels are all involved in the rescue operation in Libyan waters, 130 miles (210km) off the coast of Lampedusa and 17 miles (27km) from the Libyan coast.
The Times of Malta newspaper reported that the migrants fell overboard when they rushed to draw the attention of a passing merchant ship.
Mark Micallef, a journalist with the paper, told the BBC such incidents were “not at all uncommon”.
“We have seen this sort of scenario happen all over again, where a boat gets capsized right at the moment of rescue.