* Ukrainian troops advance towards crash site
* Fighting prevents monitors from visiting
* US and Europe prepare more sanctions
* Russia dismisses US charges it will supply more missiles
By Aleksandar Vasovic
DONETSK, Ukraine, July 27 (Reuters) - A Ukrainian push to dislodge pro-Russian rebels from the site of the downed Malaysian airliner further complicated plans for an investigation on Sunday as Europe and the United States prepared economic sanctions on Russia over the conflict.
Russia dismissed U.S. allegations it was about to hand over more missiles to the separatists, who Western leaders say almost certainly shot the airliner down by mistake with a Russian-supplied surface-to-air missile.
The separatists deny any involvement and Moscow says it has not supplied them, suggesting Ukrainian forces were to blame.
Washington said on Friday another transfer from Russia to Ukrainian separatists, this time of heavy-caliber multiple-launch rocket systems, appeared to be imminent and that Russian forces were slowly building up along the Ukrainian border.
The allegations coincided with preparations in Western capitals for tougher sanctions against Russia.
Members of the European Union, wary of the impact of broad penalties on their own economies, were expected to try to reach a final deal on Tuesday on measures including closing the bloc’s capital markets to Russian state banks, an embargo on arms sales and restrictions on dual-use and energy technologies.
The EU added new names on Friday to its list of individuals and companies facing travel bans and asset freezes over their alleged involvement in Ukraine and could agree to extend the list further as early as Monday.
Washington, which has taken the lead in imposing individual and corporate penalties on Russia, said on Friday it was likely to follow up on any new EU move with more sanctions of its own.
A Russian defence ministry spokesman, cited by Russian news agencies, did not address the latest U.S. allegations directly, but said that over the past four months 18 international inspections had not found any evidence of Russian military violations on the border with Ukraine.
Fighting around the site of the downed Malaysia Airlines flight MH17 prevented a visit by international experts on Sunday, although Malaysia said separatists had agreed to allow in international police and investigators.
The Ukrainian government said its forces were advancing towards the crash site to try to free it from the rebels, who have impeded the work of international monitors and whom Kiev accuses of tampering with evidence pointing to who shot it down.
“All our troops are aiming to get there and liberate this territory so that we can guarantee that international experts can carry out a 100-percent investigation of the site and get all proof needed to deduce the real reason for this tragedy,” said Andriy Lysenko, a spokesman for Ukraine’s Security Council.
International monitors said the fighting itself could affect the crash site, underlining the growing complexity of trying to establish who shot down the plane.
In Donetsk, Alexander Hug, deputy head for the Organization for Security and Cooperation in Europe’s monitoring mission in Ukraine, said monitors would not visit the site on Sunday.
“The situation on the ground appears to be unsafe ... we therefore decided to deploy tomorrow morning,” Hug, flanked by Dutch and Australian experts, told reporters.
“Fighting in the area will most likely affect (the) crash site,” Hug said.
The separatists are still in control of the area where the plane was shot down earlier this month but fighting in the wider eastern regions of Donetsk and Luhansk has been heavy as Ukrainian government forces try to dislodge them. It was raging in at least five different places on Sunday.
Lysenko said government troops were advancing east from the town of Makievka towards another town of Shakhtarsk, nearby the crash site. Shakhtarsk residents said air strikes hit the city.
“Our military is advancing, fighting goes on every day, every night, they have already liberated two-thirds of the territory,” Lysenko told a news conference in Kiev.
Earlier, Malaysian Prime Minister Najib Razak said an agreement reached with separatist leader Aleksander Borodai would “provide protection for international crash investigators” to recover human remains and ascertain the cause of the crash.
The OSCE has provided a team to monitor the site in advance of an investigation, but Najib said a full team of investigators was needed to ensure any human remains left there were removed.
“We also need a full deployment of investigators to have unfettered access to the crash site so we can understand precisely what happened to MH17. I hope that this agreement with Mr Borodai will ensure security on the ground, so the international investigators can conduct their work,” he said.
“Three grieving nations”, Malaysia, Australia and the Netherlands, had formed a police group to secure the site, he said in a statement issued by his office.
Among the 298 people who died aboard the Boeing 777 on its flight from Amsterdam to Kuala Lumpur on July 17 were 193 Dutch nationals, 43 Malaysians and 28 Australians.
Najib said on Saturday the separatists had fulfilled two of three conditions of a earlier deal struck - the return of victims’ bodies and of the plane’s two “black boxes” - and it was now time to proceed with the investigation.
Malaysian experts have said they believe at least 30 investigators will be required to cover the full site of the crash, in addition to Dutch investigators and an expert from the United Nations’ civil aviation body, the ICAO.
In the Australian capital Canberra, Prime Minister Tony Abbott said an unarmed police mission led by the Netherlands and made up of about 49 officers would travel to the site. Officials said a total of 170 Australian police were deployed in Ukraine.
“Our objective is to get in, to get cracking and to get out,” Abbott, who has played a leading role in pressing for an investigation, told reporters in Canberra.
“This is a risky mission, no doubt about that, but all the professional advice I have is that the safest way to conduct it is unarmed, as part of a police-led, humanitarian mission.”
Abbott said the force, including 11 Australians, would stay “as long as we can to do a thorough job” but he expected it would be no longer than three weeks. (Additional reporting by Natalia Zinets, Lina Kushch, Gabriela Baczynska and Elizabeth Piper in Kiev, Yantoultra Ngui in Kuala Lumpur and Morag Mackinnon in Perth; writing by Philippa Fletcher; editing by Anna Willard)