German Chancellor Angela Merkel also insisted that Mubarak's government put a stop to attacks against anti-government protesters and journalists.
A joint statement from the five European leaders said they are watching the unrest in Egypt with deep concern and condemned "all those who use or encourage violence, which will only aggravate the political crisis in Egypt."
The statement from Merkel, French President Nicolas Sarkozy, British Prime Minister David Cameron, Italian Premier Silvio Berlusconi and Spanish Prime Minister Jose Luis Rodriguez Zapatero urged an immediate "quick and orderly transition to a broad-based government."
Speaking in Madrid, Merkel said Mubarak's government bears responsibility for ending the attacks and making sure those responsible are arrested and prosecuted.
"Millions of Egyptians have raised their voice in the past few days, they took to the streets and nobody should think that things can just carry on as they are," she said. "Instead, there has to be a renewal, there has to be change, a real change. Otherwise people won't be satisfied."
Zapatero said European leaders "want democracy in Egypt. And we want democracy to be in peace that comes through peace and consensus. That is the obligation of the government of Egypt."
The statement and the leaders' comments came as protesters and regime supporters skirmished for a second day Thursday in central Cairo. Gangs of thugs supporting Mubarak attacked reporters, foreigners and rights workers while the army rounded up foreign journalists.
Mubarak, 82, has promised not to run in next fall's election but has refused to step down. Protesters have accused his regime of hiring thugs and plainclothes police to crush their nine-day-old movement.
EU foreign policy chief Catherine Ashton said Thursday that Egyptian authorities are accountable if they fail to protect peaceful demonstrators.
Journalists covering Egypt's unrest have been beaten, stabbed, hit with pepper spray and threatened and detained by Mubarak loyalists. The European leaders' statement said such attacks are "completely unacceptable."
Merkel reiterated her call for an immediate dialogue with all opposition forces, saying she already made that clear in a phone call to Mubarak on Sunday.
"It finally has to start now," she said.
Angela Doland contributed from Paris.