Malaysian Passenger Jet Crashes in Ukraine

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Kiev (AFP) - A Malaysian passenger liner flying from Amsterdam to Kuala Lumpur has crashed in insurgency-wracked east Ukraine, regional officials said Thursday, as Ukraine's president said the jet may have been shot down.

Malaysia Airlines said it had "lost contact" with the Boeing passenger liner, which Ukrainian officials said had come down in a rebel-held zone in the Donetsk region.

"Malaysia Airlines has lost contact of MH17 from Amsterdam," the airline, still reeling from the disappearance of flight MH370, said on its Twitter account.

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"The last known position was over Ukrainian airspace," it said, promising more details soon.

Ukrainian President Petro Poroshenko said the jet may have been shot down.

"We do not exclude that the plane was shot down and confirm that the Ukraine Armed Forces did not fire at any targets in the sky," Poroshenko said in a statement posted on the president's website.

Regional officials in Donetsk confirmed the plane had come down near the town of Shaktarsk.

"The number of dead is not yet known," the administration said in a statement.

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Emergency services were rushing to the scene, a security source told Interfax-Ukraine.

US stocks fell sharply following reports the Malaysia Airlines plane had been shot down, while Britain's Foreign Office said it was "working urgently to find out what's happened."

The incident comes just months after Malaysia's Flight MH370 disappeared on March 8 with 239 on board. The plane diverted from its Kuala Lumpur to Beijing flight path and its fate remains a mystery despite a massive aerial and underwater search.

Ukrainian jet 'downed'

The reported crash came after Kiev accused Russia of downing a Ukrainian military plane on a mission over the east of the country, stoking tensions in the growing conflict on the edges of Europe that has claimed over 600 lives.

The allegation came a day after the US and EU bolstered sanctions against Russia over its perceived support of the separatist insurgency in the ex-Soviet state.

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Moscow condemned the punitive measures against it as "blackmail" and warned of retaliatory actions against Washington.

In the first direct claim of a Russian attack on Ukrainian forces, Kiev said a Russian airforce jet shot down a Ukrainian warplane Wednesday evening -- before the fresh round of Western sanctions were announced -- as it was carrying out its duties.

The pilot of the Su-25 plane managed to eject and was rescued by Kiev forces, Ukraine's National Security and Defence Council said.

Russia's defence ministry -- which NATO claims has massed some 12,000 troops along Ukraine's porous border -- dismissed the claim as "absurd", Russian news agencies reported.

Sanctions hit Russian stocks

The dramatic developments on the ground came alongside a major diplomatic fallout over fresh Western sanctions that Washington and Brussels hope will force Moscow to help halt the conflict.

In a tough move that left the EU trailing in his wake, US President Barack Obama took a swipe at major players in Russia's finance, military and energy sectors in sanctions imposed Wednesday.

The Russian foreign ministry reacted in a furious statement: "We do not intend to tolerate blackmail and reserve the right to take retaliatory measures" against the US.

Russian President Vladimir Putin earlier warned that sanctions would inflict "very serious damage" on the already tattered US-Russia relationship.

Talks promised

In eastern Ukraine fierce fighting between government forces and pro-Moscow rebels has intensified in recent days with some 55 civilians killed since the weekend.

The fighting forced more than a dozen Ukrainian border guards to flee into Russia seeking medical help with one dying from his injuries, the Russian authorities said.

Germany and France have been spearheading a push to revive talks between Kiev and the rebels over a potential ceasefire but attempts to hold a Skype videoconference fell through Tuesday.

Ukrainian forces made a string of major gains after Poroshenko tore up an unsuccessful ceasefire earlier this month, but progress has slowed since rebels retreated into two major regional centres where they have pledged to fight to the end.

Video: Footage reportedly shows smoke billowing from the crash site in eastern Ukraine.

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