A group of 430 people facing shipwreck off Tunisia but in Malta's search and rescue area, are being taken in by Tunisia.
Tunisia informed a humanitarian NGO it has sent four assets to rescue the people on board a boat.
Alarm Phone had earlier urged the authorities to save the people, saying at least three had already died.
It accused governments of "collective non-assistance at sea" and warned that the situation was becoming "increasingly dramatic".
Following Tunisia's announcement, it said the people in distress were in an area that was under Malta responsibility so the people should be taken to Europe. It added that Tunisia is not safe for migrants.
The NGO had said earlier that the people on board the overcrowded boat said it was sinking and while the Tunisian coastguard arrived on Wednesday, it had not intervened.
"The people on the overcrowded boat said it is sinking. We alerted authorities but Italy said they are not responsible for the area. Such a big boat cannot be handled by the so-called Libyan coastguard without loss of life," it urged on social media.
In the early hours on Thursday, the NGO said it was in regular contact with the 430 people in distress who had moved forward to Malta's SAR zone.
"There’s panic on board. They say people are dying and are urgently asking for help. Authorities are not responding and there is no rescue in sight."
"Do not let them drown," the organisation urged.
Soon after 7am, the organisation raised the alarm again, saying the boat was slowly breaking apart and three people had died.
"Europe's authorities are 'monitoring but don't rescue. A shipwreck is unfolding in front of your eyes," it said.
At 10am, Alarm Phone said the situation on board is becoming increasingly dramatic and more people had reportedly died.
"The people on board say that the Tunisian coastguard arrived but doesn't intervene. What we see is collective non-assistance at sea! We demand their immediate rescue!"
A spokesperson told Times of Malta in the morning that the 430 people are in Malta's SAR but within Tunisian territorial waters.
The Armed Forces of Malta asked Times of Malta to send an email about the matter.
Amnesty International's Europe regional researcher Elisa di Pieri said that these events are a reminder of the dangers of sea crossings.
"We remain concerned for all the people who are and will be crossing the Mediterranean as winter approaches. This week, Maltese and Italian authorities as well as NGO crews collectively rescued hundreds of lives. Cooperation between coastguards and rescue NGOs is essential to save lives, so that people are rescued and disembarked at the nearest safe port without delay," she said.
On Wednesday, a woman died after a group of migrants were rescued at sea by the AFM.
The group of 43 people, many of whom looked emaciated and unwell, arrived at Senglea on board an AFM patrol boat in the morning. Twelve women and two children were among the group, the home affairs ministry said.
In September the European Union Fundamental Rights Agency flagged Malta's "intensified efforts" to stop asylum seekers from disembarking on the island during the pandemic.
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