European leaders, shocked by the horrifying image of a drowned Syrian child, have rushed out new proposals to address the escalating migrant crisis despite deep divisions in the 28-member bloc.

The heartbreaking images of three-year-old Aylan Kurdi lying dead in the surf have brought home the horror of the refugee crisis - the worst of its kind since World War II.

With tensions growing in Europe over how to handle the situation, France and Germany have agreed that the EU should now impose binding quotas on the numbers that member states should take in, having failed to reach such a deal in June.

"We agree that... we need binding quotas within the European Union to share the burden. That is the principle of solidarity," German Chancellor Angela Merkel told reporters during a visit in the Swiss capital.

European Commission President Jean-Claude Juncker will next week unveil a plan for the relocation of at least 120,000 more refugees to ease the burden on frontline EU nations Greece, Italy and Hungary.

EU president Donald Tusk also called on member states to share the resettlement of at least 100,000 refugees - far above the current agreement for 32,000.

In Britain, Prime Minister David Cameron is reportedly preparing to respond to growing pressure to accept a bigger share of refugees, by accepting thousands directly from UN camps on the border with Syria.

EU foreign ministers are set to meet in Luxembourg on Friday to discuss the escalating crisis, after pressure for action was heightened by the images of the drowned child.

Kurdi was seen in photos in a red T-shirt, blue shorts and shoes and lying motionless on the Turkish seashore before a rescue worker picks up his limp body.

"I was holding my wife's hand. But my children slipped through my hands. We tried to cling to the small boat, but it was deflating. It was dark and everyone was screaming," his grieving father Abdullah Kurdi told Turkey's Dogan news agency.

Reports said the child - one of at least 12 Syrians who died when their boats sank trying to reach Greece - and his family were trying to get to Canada from the Syrian flashpoint of Kobane, after fleeing to Turkey last year to escape Islamic State extremists.

The bleak image spread like lightning through social media and dominated front pages.

The picture also prompted a furious reaction from Turkish President Recep Tayyip Erdogan.

"European countries, which turned the Mediterranean Sea - the cradle of ancient civilisations - into a migrant cemetery are party to the crime that takes place when each refugee loses their life," he said in a speech.

Turkey is hosting 1.8 million refugees from the conflict in neighbouring Syria.

In Hungary meanwhile, ugly scenes also underscored the desperation of migrants.

Hundreds had rushed into Budapest's reopened international railway station to catch a train, only to be left feeling tricked as police halted it on the way to the Austrian border.

A large number refused orders to get off after the train was halted at Biscke, near one of Hungary's four main refugee camps, with some protesting, shouting "Germany! Germany!" and holding placards saying "Help" and "SOS".

In the Czech Republic, police were criticised for marking the hands of refugees with numbers after detaining them on a train, in a grim echo of Nazi Germany's practice of marking the arms of concentration camp prisoners.