It was one of the deadliest recent accidents in the perilous Mediterranean Sea crossing that thousands of African migrants make every year, seeking a new life in the European Union. Smugglers charge thousands of dollars a head to slip people into Europe aboard overcrowded, barely seaworthy fishing boats, providing no life vests or other safety features.
"We need only caskets, certainly not ambulances," Pietro Bartolo, chief of health services on Lampedusa, told Radio 24. He gave the death toll at 94 but said it would certainly rise as search operations continued.
"It's an immense tragedy," said Lampedusa Mayor Giusi Nicolini.
Italy's coast guard later said divers saw at least another 20 bodies around the boat, which was now lying on the bottom of the sea.
Lampedusa is closer to Africa than the Italian mainland - a mere 70 miles (113 kilometers) off the coast of Tunisia - and is the frequent destination for smugglers' boats.
The 20-meter (66-foot) boat was believed to be carrying 450 to 500 people, according to the International Organization for Migration. The boat left from Tripoli with migrants from Eritrea, Ghana and Somalia, Italian coast guard spokesman Marco Di Milla told The Associated Press.
Antonio Candela, a government health commissioner, said 159 people had been rescued.
Rescue crews hauled body bags by the dozens off coast guard ships on Thursday and lined them up under multicolored tarps on Lampedusa's docks. At sea, Italian coast guard ships, local fishing boats and helicopters from across the region combed the waters, trying to find survivors.
"Most of them can't swim. Only the strongest survived," said Simona Moscarelli, a legal expert for the IOM in Rome.
Only three of the estimated 100 women on board have been rescued so far and none of the 10 children believed on board were saved, she said. Two of the dead were pregnant.
Cmdr. Floriana Segreto of the Italian coast guard told the AP that "divers of the coast guard have found the boat on the sea floor at a depth of 40 meters (130 feet). At least 20 bodies were seen around the boat. The divers have yet to go inside the boat."
She added they were waiting for the weather to improve before they could recover more bodies.
According to Interior Minister Angelino Alfano, the ship began taking on water during the night after the motor was cut as it neared Conigli island off Lampedusa, a tiny speck of an island closer to Africa than the Italian mainland.
Usually smugglers have cellphones or satellite phones to call for help when they near shore or run into trouble, but this time they didn't. Instead, someone on board set fire to a piece of material to attract the attention of passing ships, only to have the fire spread to the ship itself.
The passengers all moved to one side to avoid the fire, flipping the ship and spilling hundreds of men, women and children into the sea, he said.
Alfano was one of several Italian officials who demanded the 28-nation European Union do more to put an end to the smuggling operations and help border countries like Italy cope.
"Let us hope that the European Union realizes this isn't an Italian problem but a European one," he said, heading to the island to oversee the recovery operation.
Pope Francis, who visited Lampedusa in July to bemoan the frequent deaths of migrants, quickly sent his condolences.
"It is shameful!" he said during an audience at the Vatican.
In a tweet, EU Home Affairs Minister Cecilia Malstrom called for a redoubling of efforts to "fight smugglers exploiting human despair."
Survivors overloaded Lampedusa's reception center, since two other boatloads of migrants landed overnight before the tragedy, one of Syrians and another of Eritreans. Over 1,000 people were squeezed into a space built for 250, Moscarelli said.
Thursday's disaster was the second shipwreck this week off Italy: On Monday, 13 men drowned while trying to reach southern Sicily when their ship ran aground just a few meters (yards) from shore.
While it was the deadliest such incident off Italy in recent times, Moscarelli said there had been similar or greater losses of life farther out at sea and off the Libyan coast in recent years.
Libya, from where the migrants left about two days ago, is a frequent departure point for migrants.
"There are lots of Eritreans in detention centers in Libya," Moscarelli said. "These people are not economic migrants. They are fleeing persecution," often from their military service.
Hundreds of migrants reach Italy's shores every day, particularly during the summer when seas are usually calmer. They are processed in centers, screened for asylum and often sent back home. Those who aren't usually melt into the general public and make their way to northern Europe, where immigrant communities are bigger and better organized.
In Italy, migrants can only work legally if they have a work permit and contract before they arrive - a policy pushed through by Italy's anti-immigrant Northern League party in a bid to stem such illegal crossings.
According to the U.N. refugee agency, 8,400 migrants landed in Italy and Malta in the first six months of the year, almost double the 4,500 who arrived during the first half of 2012.
It's still a far cry from the tens of thousands who flooded to Italy, especially through Lampedusa, during the Arab Spring exodus of 2011.
The numbers, though, have spiked in recent weeks, particularly with Syrian arrivals.
The U.N. High Commissioner for Refugees had recorded 40 deaths in the first half of 2013 for migrants arriving in Italy and Malta, and a total of 500 for all of 2012, based on interviews with survivors. Fortress Europe, an Italian observatory that tracks migrant deaths reported by the media, says about 6,450 people died in the Canal of Sicily between 1994 and 2012.
Frank Jordans contributed from Berlin.