Greece is one of the most popular routes into the European Union for people fleeing conflict and poverty. AFP
The coast guard said 12 people, all believed to be from Iraq, were rescued from an inflatable dinghy off the island of Folegandros in the southern Cyclades, 180 kilometers (112 miles) southeast of Athens.
The 11 men and one woman were taken to a hospital on the nearby island of Santorini as a precaution.
The bodies of three unidentified men were recovered from the sea.
The survivors said they had been on a larger boat that took on water and sank overnight. Most said there were originally 32 people on the boat, but one told authorities there were about 50.
The coast guard said a navy frigate joined four coast guard vessels, 8 merchant ships, three smaller private vessels, three military helicopters and a military transport plane taking part in the search and rescue operation as night approached.
``The survivors made it onto a dinghy that was tethered to the (bigger) vessel. Only two of them were wearing life jackets,'' Coast Guard spokesman Nikos Kokkalas told state-run ERT television. ``We always presume the worst-case scenario, in this case that 50 people were on the boat.''
The coast guard said the operation began Tuesday night after it received information that a vessel carrying migrants had suffered engine failure and later began taking on water south of Folegandros.
Greece is one of the most popular routes into the European Union for people fleeing conflict and poverty in Asia, the Middle East and Africa. Most attempt to cross in dinghies from the Turkish shore to the nearby eastern Aegean Greek islands.
But with increased patrols and allegations of summary deportations back to Turkey for those who arrive, many have been attempting lengthier routes on larger vessels. Folegandros, one of the southern islands in the Cyclades, is not along a usual route for migrant smugglers.
Other vessels have bypassed the Greek islands and headed directly from Turkey to Italy.