A Malaysian airliner carrying 298 people from Amsterdam to Kuala Lumpur crashed Thursday in strife-torn east Ukraine, with US officials saying it was shot down by a surface-to-air missile.

Ukraine's government said the jet was shot down in a "terrorist act", while comments attributed to a pro-Russia rebel chief suggested his men may have downed Malaysia Airlines flight MH17 by mistake, believing it was a Ukrainian army transport plane.

Russian President Vladimir Putin meanwhile said Kiev bore responsibility for the crash, which came as Ukrainian forces battle pro-Moscow insurgents in the east of the country.

As Malaysian investigators headed to the scene, the UN Security Council called an emergency session on Friday to discuss the disaster -- the second to strike the airline in just four months.

Shocked world leaders called for an international inquiry to determine the causes of a disaster with potentially far-reaching political implications, with Britain demanding a UN-led probe.

There was no sign of survivors at the crash site, where an AFP reporter saw horrific scenes, with dozens of mutilated corpses and body parts strewn through the smouldering wreck of the Boeing 777.

Charred debris stinking of kerosene stretched for kilometres across the rebel-controlled zone in the Donetsk region. A top rebel leader said his forces were prepared to agree to a short ceasefire to allow for the recovery operation.

Shell-shocked locals said the impact felt "like an earthquake" in their village of Grabove, near the Russian border.

"Those poor people," said Natalia, 36. "Do you think they understood a thing about this war in Ukraine -- even we don't understand it."

At Amsterdam's Schiphol airport, from where the ill-fated jet took off, an AFP reporter saw family members in tears, while Dutch television broadcast harrowing images of passports found in the wreck, including those of children.

Europe's flight safety body Eurocontrol said Ukrainian authorities had closed the airspace over the east of the country, after a string of countries advised their carriers to stay away.

- 'Immediate investigation' -

In Amsterdam, Malaysia Airlines vice president Huib Gorter said 283 passengers and 15 crew were aboard the plane. That total included 154 Dutch nationals, 27 Australians and 23 Malaysians.

The airline said on Twitter that Ukrainian air traffic controllers lost contact with the plane at 1415 GMT, about four hours into its flight, some 50 kilometres (30 miles) from the Russia-Ukraine border.

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

Malaysia's Prime Minister Najib Razak said on Twitter he was "shocked by reports that an MH plane crashed" and announced an "immediate investigation."

Najib later told reporters a team of investigators had been dispatched to Kiev, along with a disaster assistance team.

Europe and US stock markets were sent tumbling by the crash, which escalated tensions fuelled by broadened US and EU sanctions aimed at pressuring Russia to force the rebels in Ukraine's east to end their three-month insurgency that has claimed more than 600 lives.

US President Barack Obama offered assistance to "help determine what happened and why".

Boeing also said it was ready to assist in any way.

The Kremlin said Putin and Obama -- at loggerheads over the new wave of sanctions -- had discussed the crash. Obama later called Ukrainian President Petro Poroshenko and Najib.

Two US officials told AFP that intelligence analysts were reviewing the data to see whether the missile used to down the aircraft was launched by pro-Moscow separatists, Russian troops across the border or Ukrainian government forces.

"We are working through all the analysis," said one official.

But that there was little doubt that the plane was struck by a surface-to-air missile, the official said.

"That's what we strongly believe."

In Detroit, US Vice President Joe Biden said the plane was "apparently... and I say apparently because we don't have all the details yet... shot down. Not an accident. Blown out of the sky."

- Shot by mistake? -

There were conflicting claims of responsibility after the shocking new development in crisis-torn Ukraine, where fighting between separatists and the Western-backed government has claimed over 600 lives.

Poroshenko's spokesman said he believed pro-Russian insurgents downed the jet.

"This incident is not a catastrophe. It is a terrorist act," the spokesman, Svyatoslav Tsegolko, said on Twitter.

The Ukrainian leader said Kiev's armed forces "did not fire at any targets in the sky" and vowed "those behind this tragedy will be brought to justice".

Rebels in the self-proclaimed Lugansk People's Republic claimed the airline split in two after being shot down by a Ukrainian jet -- which was then shot down in turn.

But a social media site attributed to the top military commander of the Donetsk People's Republic, Igor Strelkov, said the insurgents shot down an army transporter at the exact site of the Malaysia Airlines crash.

The comments suggested separatists targeted the jet in the mistaken belief it was an An-26 Ukrainian army transport plane.

"We just downed an An-26 near Torez. It is down near the Progress mine," said the VK page attributed to Strelkov.

"And here is a video confirming that a 'bird fell'," said the post, providing a link identical to that published by Ukrainian media in reports about the Malaysia Airlines jet.

Alexander Borodai, prime minister of the self-proclaimed "Donetsk People's Republic", meanwhile told AFP that separatist forces would be ready to commit to a truce for several days to allow full access to the site.

- Sanctions fallout -

The crash came with tensions already soaring after Kiev accused Russia of downing a Ukrainian military plane on a mission over the east of the country on Wednesday, the first direct claim of a Russian attack on Ukrainian forces.

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

The dramatic developments on the ground came alongside the already serious fallout from fresh US and EU sanctions slapped on Russia.

Moscow condemned the measures as "blackmail" and warned of retaliatory action against Washington, which targeted major players in Russia's finance, military and energy sectors in the sanctions.

In eastern Ukraine, fierce fighting has intensified in recent days with some 55 civilians killed since the weekend, as efforts to revive talks on a ceasefire between Kiev and the rebels falter.

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

burs-ec/sst/hmn