Rapid loss estimation after potentially damaging earthquakes is critical for effective emergency response and public information. A methodology and software package, ELER-Earthquake Loss Estimation Routine, for rapid estimation of earthquake shaking and losses throughout the Euro-Mediterranean region was developed under the Joint Research Activity-3 (JRA3) of the EC FP6 Project entitled "Network of Research Infrastructures for European Seismology-NERIES". Recently, a new version (v2.0) of ELER software has been released. The multi-level methodology developed is capable of incorporating regional variability and uncertainty originating from ground motion predictions, fault finiteness, site modifications, inventory of physical and social elements subjected to earthquake hazard and the associated vulnerability relationships. Although primarily intended for quasi real-time estimation of earthquake shaking and losses, the routine is also equally capable of incorporating scenario-based earthquake loss assessments. This paper introduces the urban earthquake loss assessment module (Level 2) of the ELER software which makes use of the most detailed inventory databases of physical and social elements at risk in combination with the analytical vulnerability relationships and building damage-related casualty vulnerability models for the estimation of building damage and casualty distributions, respectively. Spectral capacity-based loss assessment methodology and its vital components are presented. The analysis methods of the Level 2 module, i.e. Capacity Spectrum Method (ATC-40, 1996), Modified Acceleration-Displacement Response Spectrum Method (FEMA 440, 2005), Reduction Factor Method (Fajfar, 2000) and Coefficient Method (ASCE 41-06, 2006), are applied to the selected building types for validation and verification purposes. The damage estimates are compared to the results obtained from the other studies available in the literature, i.e. SELENA v4.0 (Molina et al., 2008) and ATC-55 (Yang, 2005). An urban loss assessment exercise for a scenario earthquake for the city of Istanbul is conducted and physical and social losses are presented. Damage to the urban environment is compared to the results obtained from similar software, i.e. KOERILoss (KOERI, 2002) and DBELA (Crowley et al., 2004). The European rapid loss estimation tool is expected to help enable effective emergency response, on both local and global level, as well as public information.