Italian Foreign Minister Paolo Gentiloni said Europe could find itself as another Somalia if peace talks did not succeed in a few weeks.
Italy signed a joint statement with the US and several European allies on Sunday condemning "barbaric" acts carried out by the ISIS in the Libyan city of Sirte.
"Time is limited, particularly now that ISIS in Sirte has become alarming," he told the Italian daily La Stampa, referring to last week’s bloodshed.
Fighting between ISIS and local militia in Sirte erupted last week and killed about 200 people.
"We are deeply concerned about reports that these fighters have shelled densely populated parts of the city and committed indiscriminate acts of violence to terrorise the Libyan population," said a joint statement by Britain, France, Germany, Spain and the United States.
The governments of six countries want to unite on Libya to fight against all possible terror threats.
ISIS seized Libya in June with militants beheading 12 local militiamen. The coastal city slided into chaos which began in 2011 uprising backed by Western air strikes after Kaddafi driven from power.
"Urgent need for parties in Libya to reach agreement on forming a government of national accord that, in partnership with the international community, can provide security against violent extremist groups seeking to destabilise the country," the statement says.
Italy has been badly affected by hundreds of thousands of migrants who attemp to reach its shores from Libya on often unseaworthy vessels.
The Libyan government asked for an extraordinary meeting with Arab League to take measures tackling with ISIS.
A deal which aims to restore stability was partly in UN-brokered peace talks agenda but leaders of General National Congress called the deal ‘unsatisfactory’.