IOM spokesman Joel Millman said in a regular UN briefing in Geneva on Tuesday that the 21 missing people were all among the 51 on the wooden boat.
He also quoted reports as saying that two dead infants had been found on board the boat, bringing the likely death toll to 23.
Millman added that a rubber dinghy was also en route to Italy, but all 132 people on board were rescued.
The incidents occurred on Saturday, but survivors had only just reached Italy’s port of Pozzallo, Millman said. Other survivors were sent back to Libya.
The probable deaths made the incident the most fatal in more than a month on the central Mediterranean refugee route between Libya and Italy, with only one body was found in Libya since February 2.
The Libya-Italy route became one of the major passageways for asylum seekers to Europe after the ouster and death of long-time dictator Muammar Gaddafi in 2011.
Local human traffickers took advantage of a security vacuum in the conflict-ridden country and sailed hundreds of thousands of refugees and asylum seekers — packed onto unseaworthy boats and dinghies — across the Mediterranean Sea to Europe.
Meanwhile, Millman noted that another route has become much more dangerous.
"We continue almost every day to learn of deaths in Moroccan, Algerian and Spanish waters," Millman said.
"We understand the total for the first 63 days of the year is 105 deaths on that route, which is well ahead of what things were like a year ago, when we just had 44," he added.