US President Barack Obama said the downing of a Malaysian jetliner in a Ukrainian region controlled by Russian-backed separatists should be a "wake-up call for Europe and the world" in a crisis that appears to be at a turning point and warned Russia of possible tightening of sanctions.

While stopping short of blaming Russia for Thursday's crash of Malaysia Airlines Flight MH17, in which 298 people died, Obama accused Moscow of failing to stop the violence that made it possible to shoot down the plane.

The US has said the jetliner was hit by a surface-to-air missile fired from rebel territory.

A senior US official said there was increasing confidence that the missile was fired by separatists and that there was no reason to doubt the validity of a widely circulated audiotape in which voices identified as separatists discussed the downing of the plane.

"This certainly will be a wake-up call for Europe and the world that there are consequences to an escalating conflict in eastern Ukraine; that it is not going to be localised, it is not going to be contained," Obama told reporters on Friday.

Obama spoke by phone later with German Chancellor Angela Merkel, British Prime Minister David Cameron and Australian Prime Minister Tony Abbott. The White House said they discussed Ukraine and the downed jet and the need for an unimpeded international investigation into what happened.

International observers said gunmen stopped them examining the site properly when they got there on Friday. More than half of the victims were Dutch in what has become a pivotal incident in deteriorating relations between Russia and the West.

Obama ruled out military intervention, but said he was prepared to tighten sanctions.

Russia, which 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 an inquiry.

There were no survivors from 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.

The loss was the second devastating blow for Malaysia Airlines and the country this year, following the disappearance of Flight MH370 in March with 239 passengers and crew on board on its way from Kuala Lumpur to Beijing.

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 kitchen."

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 US 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 US into World War One, but outrage in the West at Thursday's carnage is not seen as leading to military intervention.

The UN 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 took a similar line but later echoed Obama in pointing the finger at the separatists.

Kiev and Moscow immediately blamed each other for the disaster, triggering a new phase in their propaganda war.

Russia's Defence Ministry laid the blame with 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.

The OSCE monitors said they could not find anyone to talk to about the plane's two black boxes - voice and data recorders - and villagers were seen removing pieces of wreckage.

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 Grabovo.

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.

But the Malaysian government is likely to come under further pressure after saying on Friday that the flight path over Ukraine had been declared safe by the UN International Civil Aviation Organization (ICAO) which, it said, had since closed the route.

The ICAO later said it did not have the power to open or close routes and that individual nations were responsible for advising on potential hazards.

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.

More than half of the dead passengers, 189 people, were Dutch. Twenty-nine were Malaysian, 27 Australian, 12 Indonesian, 10 British, four German, four Belgian, three Filipino, one American, one Canadian, one New Zealand. Several were unidentified and some may have had dual citizenship. The 15 crew were Malaysian.

A number of those on board were travelling to an international AIDS conference in Melbourne, including Joep Lange, an influential Dutch expert. - Reuters