Hollande said in a statement he was outraged at the "abominable" murder shown in a video by the Islamic State (IS) group released Sunday.
"A national peace deal remains both necessary and urgent to restore order and security in Libya," read the statement.
Awash with weapons since its 2011 revolt and torn between rival governments and parliaments, Libya is on the edge of all-out civil war as armed groups do battle for its cities and oil wealth.
The Islamic State, which has seized chunks of Syria and Iraq, has won the support of jihadist groups across Middle East and north Africa.
Several Libyan jihadist groups have pledged allegiance to the militants.
The issue of Libya was the subject of a political spat between former president Nicolas Sarkozy and the far-right Marine Le Pen over the weekend.
After Sarkozy tweeted out his sadness at news of the latest boat tragedy involving migrants, Le Pen blasted him on Twitter for helping to create the crisis by choosing to take action to oust former Libyan dictator Muammar Gaddafi.
On Monday the foreign ministers from around Europe had been due to discuss the situation in war-torn Libya, now a major transit point for people from all over Africa and the Middle East trying to get to Europe.
Exploited by ruthless people smugglers, thousands take to the sea in rickety boats at the mercy of the elements and prone to capsize.
Italy, which has borne the brunt of the latest exodus, said only 28 people out of 700 survived the latest shipwreck off Libya.
Following the disaster Hollande joined calls for action to be taken to increase the protection for migrants and to tackle the people smugglers, whom he described as "terrorists".
He did not however spell out what France would or could do to help ease the situation.
Hollande called for "more boats, more aerial surveillance and an intensified fight against trafficking".
"Because those who put these people on boats are traffickers, terrorists even, because they know these boats are lousy... and put hundreds of people in danger."