Some 500 survivors were pulled to safety, the coastguard told AFP, illustrating the huge challenge that continues to bedevil authorities as people try to reach Europe.
The latest deaths came as the Italian government presented plans for a naval mission in Libyan territorial waters that aims to reduce the flow of migrants from the coast.
Spanish NGO Proactiva Open Arms, which was taking part in the rescues, said the corpses were recovered by the Santa Lucia merchant ship.
The charity said there were 79 women and 39 minors -- including four young children -- among those rescued.
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Nearly 95,000 people have been brought to safety in Italy this year, a rise of one per cent on the same period last year, according to the interior ministry.
The government intends to send a logistics ship that could support Libyan units and will also offer a patrol boat, Italian Defence Minister Roberta Pinotti told lawmakers today.
"Italy has always respected Libyan sovereignty," Pinotti added.
At least 2,385 migrants have died during the perilous crossing since January, the International Organization for Migration (IOM) said.
The latest deaths come as aid groups -- privately-funded boats performed 26 per cent of rescues in 2016, rising to 35 per cent so far this year -- are caught in a row over how they operate.
Medical charity Doctors Without Borders (MSF) refused yesterday to sign a code of conduct on migrant-saving operations in the Mediterranean.
The code, created to address the biggest migrant phenomenon in Europe since World War II, lays down 13 rules Italy insists must be followed to prevent aid groups rescuing migrants from acting as a magnet for human traffickers.
But the rules have been widely criticised by the NGOs as making it more difficult for them to save lives.
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