There were no survivors from Thursday's crash, which left wreckage and bodies scattered across miles of rebel-held territory near Ukraine's border with Russia.
The scale of the disaster could prove a turning point for international pressure to resolve the crisis in Ukraine, which has killed hundreds since protests toppled the Moscow-backed president in Kiev in February and Russia annexed the Crimea a month later.
While the West has imposed sanctions on Russia over Ukraine, the United States has been more aggressive than the European Union in this respect. Analysts believe the response of Germany and other European powers to the incident could be crucial in deciding the next phase of the stand-off with Moscow.
The United States called for an immediate ceasefire to allow easy access to the crash site, while pro-Russian separatists told the Organization for Security and Co-operation in Europe (OSCE), a security and rights body, they would ensure safe access for international experts visiting the scene.
The plane crashed about 40 kilometres (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.
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.
Ukraine on Friday closed the air space over the east of the country.
The plane's two black boxes - voice and data recorders - were recovered, but since the crash site was in rebel hands it was unclear who would analyse them and whether they could shed light on the crucial question of who fired the missile.
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.
Makeshift white flags marked where bodies lay in corn fields and among the wreckage.
An emergency worker said at least 100 bodies had been found so far and that debris was spread over 15 km (9 miles). The airline said it was carrying 283 passengers and 15 crew.
"I was working in the field on my tractor when I heard the sound of a plane and then a bang," one local man told Reuters at Hrabove, known in Russian as Grabovo. "Then I saw the plane hit the ground and break in two. There was thick black smoke."
U.S. Vice President Joe Biden said it appeared the downing of the jetliner was not an accident and that it apparently was "blown out of the sky".
"While we do not yet have all the facts, we do know that this incident occurred in the context of a crisis in Ukraine that is fuelled by Russian support for the separatists, including through arms, materiel, and training," White House spokesman Josh Earnest said in a statement.
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.
Most of the dead, 173 people, were Dutch. Twenty-eight were Malaysian, 28 Australian, 12 Indonesian, nine British, four German, four Belgian, three Filipino and one each from Canada and New Zealand. All 15 crew were Malaysian. Nationalities of the others aboard were unclear.
A number of those on board were travelling to an international AIDS conference in Melbourne, including Joep Lange, an influential Dutch expert.
"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.
"If it transpires that the plane was indeed shot down, we insist that the perpetrators must swiftly be brought to justice," Malaysian Prime Minister Najib Razak told a pre-dawn news conference in Kuala Lumpur.
"This is a tragic day, in what has already been a tragic year, for Malaysia."
Relatives gathered at the airport in Kuala Lumpur.
Akma Mohammad Noor said her sister Rahimah was coming home to mark the Muslim festival of the end of Ramadan. "We were supposed to celebrate," Noor said, weeping.
The Netherlands declared a day of national mourning.
Ukraine accused pro-Moscow militants, aided by Russian military intelligence officers, of firing a long-range, Soviet-era SA-11 ground-to-air missile.
Russian President Vladimir Putin - accused by the West of backing the rebels in Ukraine - pinned the blame on 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 brought the Boeing 777 down.
He later called for a "thorough and unbiased" investigation.
U.S. President Barack Obama said evidence from the crash must remain in Ukraine so international investigators have a chance to look at all of it, officials said.
The White House said the United States was willing to contribute immediate assistance to the investigation.
The OSCE said a "contact group" of senior representatives from Ukraine, Russia and the OSCE had held a video conference with the separatists, who pledged to cooperate with Ukrainian authorities in the investigation.
Kiev complained that separatists prevented Ukrainian officials from reaching the site, where pro-Russian separatists said they had found one of the "black box" recorders. Rescue workers recovered a second recorder on Friday.
U.N. Secretary-General Ban Ki-moon also called for a transparent international investigation. The U.N. Security Council will discuss the issue on Friday.
Ukrainian President Petro Poroshenko, who had stepped up an offensive in the east, 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.
News of the disaster came as Obama was on the phone with Putin, discussing a new round of economic sanctions that Washington and its allies have imposed to try to force Putin to do more to curb the revolt against the new government in Kiev.
Obama warned of further sanctions if Moscow did not change course in Ukraine, the White House said.
After the downing of several Ukrainian military aircraft in the area in recent months, including two 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.
International air lanes had been open in the area, though only above 32,000 feet (9,750 metres). The Malaysia plane was flying 1,000 feet higher, officials said. (Additional reporting by Richard Balmforth and Natalya Zinets in Kiev, Alissa de Carbonnel, Timothy Heritage and Maria Tsvetkova in Moscow, Thomas Escritt in Amsterdam, Anuradha Raghu, Siva Govindasamy and Trinna Leong in Kuala Lumpur and Jane Wardell and Matt Siegel in Sydney; Writing by Dean Yates and Giles Elgood; Editing by Alex Richardson and Will Waterman)