A man walks at the site of a Malaysia Airlines Boeing 777 plane crash near the settlement of Grabovo in the Donetsk region, July 17, 2014.

Russia's President Vladimir Putin (back) and other high-ranked officials observe a minute of silence for victims of the Malaysia Airlines Boeing 777 plane crash before a meeting on economic issues.

Armed pro-Russian separatists stand at the site of a Malaysia Airlines Boeing 777 plane crash near the settlement of Grabovo in the Donetsk region, July 17, 2014.

An armed pro-Russian separatist takes pictures at the site of a Malaysia Airlines Boeing 777 plane crash near the settlement of Grabovo in the Donetsk region, July 17, 2014.

The site of a Malaysia Airlines Boeing 777 plane crash is seen near the settlement of Grabovo in the Donetsk region, July 17, 2014.

A screen showing arrival details of Malaysia Airlines flight MH17 (4th from top) is seen at Kuala Lumpur International Airport in Sepang July 18, 2014.

A man stands in front of a display showing plane locations around Malaysia at Kuala Lumpur International Airport in Sepang July 18, 2014.

World leaders demanded an international investigation into the shooting down of a Malaysian airliner over eastern Ukraine in which all 298 people on board were killed, a tragedy that could further heighten tensions between Russia and the West.

One U.S. official said Washington strongly suspected a surface-to-air missile that downed the Malaysia Airlines Boeing 777 on a flight from Amsterdam to Kuala Lumpur on Thursday was fired by Ukrainian separatists backed by Moscow.

There was no evidence Ukrainian government forces fired a missile, said the official, speaking on condition of anonymity. U.S. Vice President Joe Biden, speaking in Detroit, said the passenger jet was apparently "blown out of the sky".

Australian Prime Minister Tony Abbott appeared to go further than other Western leaders in apportioning blame, demanding on Friday that Moscow answer questions about the "Russian-backed rebels" that he said were behind the disaster.

More than 20 Australians were among the many nationalities aboard Flight MH17. The Netherlands was the worst affected, with 154 Dutch citizens on the downed plane.

The plane crashed near the village of Hrabove about 40 km (25 miles) from the border with Russia near the regional capital of Donetsk, an area that is a stronghold of rebels who have been fighting Ukrainian government forces for several months.

Ukraine accused pro-Moscow militants, aided by Russian military intelligence officers, of firing a long-range, Soviet-era SA-11 ground-to-air missile. Leaders of the rebel Donetsk People's Republic denied any involvement and said a Ukrainian air force jet had brought down the intercontinental flight.

Russian President Vladimir Putin - at loggerheads with the West over his policies toward Ukraine - pinned the blame on Kiev for renewing its offensive against rebels two weeks ago after a ceasefire failed to hold. The Kremlin leader called it a "tragedy" but did not say who brought the Boeing 777 down.

DISBELIEF IN MALAYSIA

The loss of MH17 is the second for Malaysia Airlines this year, following the mysterious disappearance of Flight MH370 in March, which vanished with 239 passengers and crew on board on its way from Kuala Lumpur to Beijing.

In Malaysia, there was a sense of disbelief that another airline disaster could strike so soon.

"If it transpires that the plane was indeed shot down, we insist that the perpetrators must swiftly be brought to justice," Malaysian Prime Minister Najib Razak told a pre-dawn news conference in Kuala Lumpur.

"This is a tragic day, in what has already been a tragic year, for Malaysia."

U.S. President Barack Obama, who spoke to Dutch Prime Minister Mark Rutte as well as other leaders, said evidence from the crash must remain in Ukraine so international investigators have a chance to look at all of it, officials said.

"The president and prime minister (Rutte) agreed on the need to assure immediate access to the site of the incident to international investigators in order to facilitate the recovery of remains and to carry out a thorough investigation," the White House said.

U.N. Secretary-General Ban Ki-moon also called for a transparent international investigation of the incident. The U.N. Security Council will discuss the issue on Friday.

Kiev complained that separatists prevented Ukrainian officials from reaching the site. Separatists were later quoted as saying they had found one of the black box flight recorders.

Financial markets were hit by worries of new geopolitical tensions, as Israel invaded the Gaza Strip on the same day.

SANCTIONS

Ukrainian President Petro Poroshenko, who had stepped up an offensive in the east, spoke to Obama and sought to rally world opinion behind his cause. "The external aggression against Ukraine is not just our problem but a threat to European and global security," he said in a statement.

The scale of the disaster could prove a turning point for international pressure to resolve the crisis, which has killed hundreds since protests toppled the Moscow-backed president in Kiev in February and Russia annexed the Crimea a month later.

Russia, which Western powers accuse of trying to destabilise Ukraine to maintain influence over its old Soviet empire, has accused Kiev's leaders of mounting a fascist coup. It says it is holding troops in readiness to protect Russian-speakers in the east - the same rationale it used for taking over Crimea.

As word came in of what might be the worst ever attack on a civilian airliner, Obama was on the phone with Putin, discussing a new round of economic sanctions that Washington and its allies have imposed to try to force Putin to do more to curb the revolt against the new government in Kiev.

Obama warned of further sanctions if Moscow did not change course in Ukraine, the White House said.

NATIONAL MOURNING IN NETHERLANDS

Reuters journalists saw burning and charred wreckage bearing the red and blue Malaysia Airlines insignia and dozens of bodies in fields near the village of Hrabove.

"I was working in the field on my tractor when I heard the sound of a plane and then a bang," one local man told Reuters at Hrabove, known in Russian as Grabovo. "Then I saw the plane hit the ground and break in two. There was thick black smoke."

An emergency worker said at least 100 bodies had been found so far and that debris was spread over 15 km (9 miles).

The airline said it was carrying 283 passengers and 15 crew.

The Netherlands declared a day of national mourning for its 154 dead. Twenty-eight passengers were Malaysian, 27 Australian, 12 Indonesian, nine British, four German, four Belgian, three Filipino and one Canadian. All 15 crew were Malaysian. Nationalities of the others aboard were unclear.

Ukrainian officials accused rebels of using a Soviet-era SA-11 missile system acquired from Russia - offering evidence that they may have believed they were firing on a Ukrainian military aircraft.

The Ukrainian government released recordings it said were of Russian intelligence officers discussing the shooting down of an aircraft by rebels they were supporting. Supposedly timed within minutes of the last radar contact with MH-17 around 4:20 p.m. (1320 GMT), they suggested militants thought they had hit a Ukrainian military plane before finding the airliner remains.

"Hell," says one of those being recorded. "It's almost 100 percent certain that it's a civilian plane. Bits were falling in the streets ... Bits of seat, bodies."

After the downing of several Ukrainian military aircraft in the area in recent months, including two this week, Kiev had accused Russian forces of playing a direct role.

Separatists were quoted in Russian media last month saying they had acquired a long-range SA-11 anti-aircraft system.

International air lanes had been open in the area, although only above 32,000 ft (9,750 metres). The Malaysia plane was flying 1,000 ft higher, officials said. The area was closed to flights afterwards.

Some international airlines, including Australia's Qantas Airways and Korea's two major carriers, shifted the route taken by flights operating over Ukrainian air space months ago amid increasing tensions between Kiev and pro-Moscow rebels.

The U.S. Federal Aviation Administration issued an order prohibiting American aircraft from flying over eastern Ukraine.

At the airport in Kuala Lumpur, relatives of those aboard gathered, hoping for word.

Akma Mohammad Noor said her sister, Rahimah, was on the flight, coming home for the first time in years to mark the Muslim festival of the end of Ramadan.

"We were supposed to celebrate," Noor said, weeping.

(Additional reporting by Richard Balmforth and Natalya Zinets in Kiev, Alissa de Carbonnel, Timothy Heritage and Maria Tsvetkova in Moscow, Thomas Escritt in Amsterdam and Anuradha Raghu in Kuala Lumpur and Jane Wardell and Matt Siegel in Sydney; Writing by Alastair Macdonald and Dean Yates; Editing by Alex Richardson)