Franco Frattini, the foreign minister in Rome, called for an 'immediate suspension' of military operations to allow humanitarian aid to be brought to the wartorn country.
He also said military leaders should provide more details about Nato bombing raids following mistakes which led to civilians being killed.
His demand for a ceasefire echoed comments by Arab League Chairman Amr Moussa on Tuesday.
However, British Prime Minister David Cameron played down calls to stop the mission and said it would eventually reach a 'satisfactory conclusion'.
Nato's mission - to enforce a no-fly zone over Libya to protect civilians from Colonel Muammar Gaddafi's troops - began in March after the tyrant launched a violent crackdown on a pro-democracy uprising.
But despite three months of military action and thousands of airstrikes against Libyan forces the dictator remains in power.
Concerns about the credibility of the mission increased after a Nato missile apparently misfired on Sunday striking a residential area and killing nine people, including two young children.
Speaking to the Italian parliament, Mr Frattini called for 'an immediate humanitarian suspension of hostilities' to allow aid corridors to be set up to relieve stricken citizens in areas around the besieged city of Misrata and Tripoli, the Libyan capital.
He added: 'With regard to Nato, it is fair to ask for increasingly detailed information on results as well as precise guidelines on the dramatic errors involving civilians. Read More