Ireland went into the Group E encounter in Bordeaux with a one-point advantage over Belgium, but three second-half goals earned Marc Wilmots' team a comfortable victory.
Having been impressed with his side's work on the ball in the 1-1 draw with Sweden in their opening match, O'Neill was frustrated by how readily they gave possession away on Saturday.
"We accept the fact that individually Belgium are as talented as anyone in the competition but the goals we gave away were not great," said O'Neill.
"My disappointment stems from the fact that a few days against Sweden we played exceptionally well with the ball. Today we looked a bit nervous on the ball and it was coming back too quickly.
"It's disappointing that the goal came from a break after we had the ball in the area. Then the game got stretched and great players like they have can punish you - and that's what happened.
"There's two ways of looking at it; you can feel very sorry for yourself and feel it's gone, or you can take some confidence from the way you played against Sweden."
Ireland face group winners Italy in their final match of the first phase and will need a positive result to have a chance of qualifying.
O'Neill does not envisage problems raising the spirits of his players and will encourage them to push for three points.
"I don't think it'll be difficult to raise them," he said. "We felt that we could do something in this game but it didn't materialise and now we just have to do everything we can to beat Italy.
"I'm not responsible for anything that Italy might think or do. I think that they're going to finish top regardless.
"All I know is what we have to try to do ourselves. That can be our only thought. We've a game to win and we're going to throw everything into trying to do that."