Leaders discussed a common response to Britain's decision to leave the EU, and the British Prime Minister's declaration to them that the UK must be allowed to limit migration if the EU wants to have a trade deal.
During the meeting, the European Council said Britain would be treated as a "third country" with both "rights and obligations".
However the President of the European Council, Donald Tusk, said Britain cannot have unfettered access to the single market without allowing free movement of EU workers.
"Leaders made it crystal clear today that access to the single market requires acceptance of all four freedoms including the freedom of movement. There will be no single market a la carte."
Scottish First Minister Nicola Sturgeon has also been in Brussels meeting with EU officials to discuss Scotland's future relationship with the rest of Europe.
Ms Sturgeon has raised the possibility of a second independence referendum for Scotland, but said options for keeping Scotland in the single market would be considered.
"I've received a lot of sympathy and a lot of good wishes today. That of course doesn't translate into an automatic easy path for Scotland through the situation we find ourselves in, which I stress is not a situation of our making. But it does mean I leave Brussels tonight to travel back to Edinburgh in good heart and optimistic."
However, the French president and Spanish prime minister have both said they are opposed to the EU negotiating potential membership for Scotland, saying that if the UK leaves the EU, then Scotland must also leave.
Meanwhile, British Opposition Labour leader Jeremy Corbyn is facing intense pressure to resign.
More than 170 of the 229 Labour MPs backed a motion of no-confidence in Mr Corbyn, whom they accuse of failing to make a strong case for Britain to remain in the European Union.
But Mr Corbyn is refusing to step down, pointing out the Labour leader is elected by party members, not the parliamentary party.
Among those urging Mr Corbyn to go is a senior figure in the Labour party, Margaret Beckett.
"Never in my wildest dreams. Jeremy's the ninth labour leader I have served. Never in my wildest dreams did I imagine I would be casting a vote of no confidence in the leader of the Labour party. I have been loyal to every single one of them with their different views and approaches."
British Prime Minister David Cameron had these words for Mr Corbyn in the House of Commons:
"I have to say to the Honourable Gentleman, he talks about job security and my two months to go. It might be in my party's interest for him to sit there, it's not in the national interest and I would say 'For heaven's sake, man, go.'"
Meanwhile, the British government has promised to implement a new action plan to target hate crime.
It comes amid a sharp increase in racially-motivated attacks since Britain's vote to leave the EU.
Mr Cameron announced extra funding to address the matter, saying all sides in the referendum debate should condemn the abuse.
Home Office Minister Karen Bradley said every incident of racial abuse should be investigated.
"The scenes and behaviour we have seen in recent days, including offensive grafitti and abuse hurled at people because they are members they are members of ethnic minorities or because of their nationality, are despicable and shameful."
