"We condemn the repression against peaceful demonstrators and deplore the violence and the death of civilians," said a statement issued after a meeting of European foreign ministers.
"The EU urges the authorities to exercise restraint and calm and to immediately refrain from further use of violence against peaceful demonstrators," the ministers said, adding that "the legitimate aspirations and demands of the people for reform" must be addressed through dialogue.
The crackdown in oil-rich Libya is shaping up to be the most brutal repression of anti-government protests that began with uprisings in Tunisia and Egypt. The protests spread quickly around the region to Bahrain in the Gulf, impoverished Yemen in the Arabian Peninsula, the North African neighbors of Tunisia - Libya, Algeria, Morocco - and outside the Middle East to places including the East African nation of Djibouti and even China.
U.S.-based Human Rights Watch said 173 people have died in three days of unrest in Libya, which has seen commandos and foreign mercenaries loyal to longtime leader Moammar Gadhafi attack demonstrators with assault rifles and other heavy weapons.
An EU official in Brussels said Libyan officials in Tripoli had told the ambassador of Hungary - which holds the EU's rotating presidency - that they would discontinue cooperation with the EU in blocking immigration from the North Africa to Europe, if the bloc continued backing the protesters. The official, who was not authorized to speak to the media, spoke on condition of anonymity.
"We have heard threats, we hear people saying you should do this, you should do that, but in the end the EU will do what is right," EU foreign policy chief Catherine Ashton replied when asked about the Libyan warnings.
"We've been urging restraint and we continue to do so," Ashton told reporters ahead of the meeting of foreign ministers called to discuss the rapidly evolving situation in the Middle East and North Africa.
The ministers on Sunday discussed economic, political and other ways in which the bloc can help the region engulfed in uprisings. These include a broader package of economic assistance to the countries involved. No immediate decisions were expected either at Sunday's informal dinner talks or at a regular monthly meeting of foreign ministers on Monday.
Italian Foreign Minister Franco Frattini said Rome - which has strong political and economic ties with Libya, which it occupied for 30 years until 1943 - "is following very closely the whole situation in Northern Africa."
"Italy is the closest neighbor to both Libya and Tunisia, and we are very worried about the repercussions on migration," he said.
Thousands of migrants have already arrived on the tiny Italian island of Lampedusa, following the Jan. 14 ouster of Tunisia's longtime president and a breakdown in coastal patrols.
Ministers said the EU will consider new ways of supporting pro-democracy reforms in the region.
She is scheduled to hold talks on Tuesday with Egyptian government officials, opposition leaders and youth and women's groups.
The EU already provides billions of euros (dollars) in aid to countries such as Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, the Palestinians, Syria and Tunisia.
Finland's Foreign Minister Alexander Stubb said events in Libya remained "a huge enigma."
"All we can do at this stage is call for nonviolence," he said. "To be quite honest, I wouldn't put anything past Gadhafi."