* Obama warns of further sanctions, says American among dead
* Ukraine says rebel missile shoots down Boeing 777 with 298
* Rebels deny role, though have said recently they have such
* Netherlands in mourning, more than half those aboard were
(Releads with Obama, American killed)
By Anton Zverev
HRABOVE, Ukraine, July 18 U.S. President Barack
Obama demanded Russia stop supporting separatists in eastern
Ukraine after the downing of a Malaysian airline by a
surface-to-air missile he said was fired from rebel territory
raised the prospect of more sanctions on Moscow.
At least one American was among the almost 300 killed, he
said, a revelation that raises the stakes in a pivotal incident
in deteriorating relations between Russia and the West.
Calling it "an outrage of unspeakable proportions", Obama
stopped short of directly blaming Russia for the incident but
warned that he was prepared to tighten economic sanctions. He
echoed international calls for a rapid and credible
investigation and ruling out U.S. military intervention.
But, noting the global impact of the crash, with victims
from 11 countries across four continents, he said the stakes
were high for Europe, a clear call for it to follow the more
robust sanctions on Russia already imposed by Washington.
Russia, whom Obama said was letting the rebels bring in
weapons, has expressed anger at implications it was to blame,
saying people should not prejudge the outcome of the inquiry.
There were no survivors from the Malaysia Airlines
flight MH17 from Amsterdam to Kuala Lumpur, a Boeing 777. The
United Nations said 80 of the 298 aboard were children. The
deadliest attack on a commercial airliner, it scattered bodies
over miles of rebel-held territory near the border with Russia.
Makeshift white flags marked where bodies lay in corn fields
and among the debris. Others, stripped bare by the force of the
crash, had been covered by polythene sheeting weighed down by
stones, one marked with a flower in remembrance.
One pensioner told how a woman smashed though her roof:
"There was a howling noise and everything started to rattle.
Then objects started falling out of the sky," said Irina
Tipunova, 65. "And then I heard a roar and she landed in the
An American-Dutch dual national was confirmed aboard - more
than half those who died were Dutch - and U.S. investigators
prepared to head to Ukraine to assist in the investigation.
Staff from Europe's OSCE security body visited the site but
complained that they did not have the full access they wanted.
The scale of the disaster could prove a turning point for
international pressure to resolve the crisis in Ukraine, which
has killed hundreds since pro-Western protests toppled the
Moscow-backed president in Kiev in February and Russia annexed
the Crimea peninsula a month later.
"This outrageous event underscores that it is time for peace
and security to be restored in Ukraine," Obama said, adding that
Russia had failed to use its influence to curb rebel violence.
While the West has imposed sanctions on Russia over Ukraine,
the United States has been more aggressive than the European
Union. Analysts say the response of Germany and other EU powers
to the incident - possibly imposing more sanctions - could be
crucial in deciding the next phase of the standoff with Moscow.
Some commentators even recalled Germany's sinking of the
Atlantic liner Lusitania in 1915, which helped push the United
States into World War One, but outrage in the West at Thursday's
carnage is not seen as leading to military intervention.
The U.N. Security Council called for a "full, thorough and
independent international investigation" into the downing of the
plane and "appropriate accountability" for those responsible.
German Chancellor Angela Merkel said it was too early to
decide on further sanctions before it was known exactly what had
happened to the plane. Britain said the facts must be
established by a UN-led investigation before additional
sanctions were seriously considered.
Kiev and Moscow immediately blamed each other for the
disaster, triggering a new phase in their propaganda war.
The plane crashed 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 and have brought down military aircraft.
Leaders of the rebels' self-proclaimed Donetsk People's
Republic denied any involvement and said a Ukrainian air force
jet had brought down the intercontinental flight.
Russia's Defence Ministry later pointed the finger at
Ukrainian ground forces, saying it had picked up radar activity
from a Ukrainian missile system south of Donetsk when the
airliner was brought down, Russian media reported.
The Ukrainian security council said no missiles had been
fired from its armouries. Officials also accused separatists of
moving unused missiles into Russia after the incident.
The Ukrainian government released recordings it said were of
Russian intelligence officers discussing the shooting down of a
civilian airliner by rebels who may have mistaken it for a
Ukrainian military plane.
After the downing of several Ukrainian military aircraft in
the area in recent months, including two earlier 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.
Latvia, a former Soviet state which like Ukraine has a large
ethnic Russian minority, said Moscow bore "full responsibility"
for providing the separatists with missiles. Baltic neighbour
Lithuania spoke of "a brutal act of terror".
The OSCE said 30 observers and experts from the
organisation, which has monitors in the region, had reached the
site on Friday: "We have to work there quickly to see what's
going on in terms of safety and security of the perimeter, the
state of the bodies, the wreckage and also the black boxes,"
spokesman Michael Bociurkiw said near the crash scene.
The plane's two black boxes - voice and data recorders -
were recovered, but it was unlikely they could determine it was
a missile strike - let alone who launched it.
Further complicating any investigation, local people were
seen removing pieces of wreckage as souvenirs. The condition of
the metal can indicate if it has been struck by a missile.
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, known in Russian as
Ukraine said on Friday that up to 181 bodies had been found.
The airline said it was carrying 283 passengers and 15 crew.
Ukraine has closed air space over the east of the country as
Malaysia Airlines defended its use of a route that some other
carriers had been avoiding.
More than half of the dead passengers, 189 people, were
Dutch. Twenty-nine were Malaysian, 27 Australian, 12 Indonesian,
nine British, four German, four Belgian, three Filipino, one
America, one Canadian, one New Zealand. Several were
unidentified and some may have had dual citizenship. The 15 crew
A number of those on board were travelling to an
international AIDS conference in Melbourne, including Joep
Lange, an influential Dutch expert.
"We lost somebody who wanted to make the world a better
place," said his friend Marcel Duyvestijn.
"TRAGIC DAY, TRAGIC YEAR"
The loss of MH17 is the second devastating blow 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.
"This is a tragic day, in what has already been a tragic
year, for Malaysia," Prime Minister Najib Razak said.
International air lanes had been open in the area, though
only above 32,000 feet. The Malaysia plane was flying 1,000 feet
higher, at the instruction of Ukrainian air traffic control,
although the airline had asked to fly at 35,000 feet.
Relatives gathered at the airport in Kuala Lumpur and the
Netherlands declared a day of national mourning, without
Ukraine accused pro-Moscow militants of firing a long-range,
Soviet-era SA-11 ground-to-air missile. U.S. officials said that
they saw this as possibly the most likely cause of the disaster.
Russian President Vladimir Putin blamed 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 he thought had brought the Boeing 777 down.
He also called for a "thorough and unbiased" investigation
and for a ceasefire to allow for negotiations.
Ukrainian President Petro Poroshenko, who had stepped up an
offensive in the east this month, 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.
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.
(Additional reporting by Natalya Zinets, Pavel Polityuk, Peter
Graff and Elizabeth Piper in Kiev, Tim Heritage, Vladimir
Soldatkin, Polina Devitt, Thomas Grove and Gabriela Baczynska in
Moscow, Thomas Escritt in Amsterdam, Anuradha Raghu, Siva
Govindasamy and Trinna Leong in Kuala Lumpur, Jane Wardell and
Matt Siegel in Sydney and Phil Stewart, Warren Strobel, Jeff
Mason, Steve Holland and Matt Spetalnick in Washington; Writing
by Giles Elgood and Philippa Fletcher; Editing by Will Waterman
and Alastair Macdonald)