* Ukraine says rebels hamper access to crash site
* Rebels say Kiev dragging its feet, black boxes not found
* Ukraine says experienced Russian crew fired fatal missile (Adds British comment, State Department statement on Kerry-Lavrov phone call; in paragraphs 7-8, 13, 21)
By Anton Zverev and Peter Graff
HRABOVE/DONETSK, Ukraine, July 19 (Reuters) - Ukraine accused Russia and pro-Moscow rebels on Saturday of destroying evidence to cover up their guilt in the shooting down of a Malaysian airliner that has accelerated a showdown between the Kremlin and Western powers.
As militants kept international monitors away from wreckage and scores of bodies festered for a third day, Russian President Vladimir Putin urged the rebels to cooperate and insisted that a U.N.-mandated investigation must not leap to conclusions. Moscow denies involvement and has pointed a finger at Kiev's military.
The Dutch government, whose citizens made up most of the 298 aboard MH17 from Amsterdam, said it was "furious" at the manhandling of corpses strewn for miles over open country and asked Ukraine's president for help to bring "our people" home.
After U.S. President Barack Obama said the loss of the Kuala Lumpur-bound flight showed it was time to end the conflict, Germany called it Moscow's last chance to cooperate.
European powers seemed to swing behind Washington's belief Russia's separatist allies were to blame. That might speed new trade sanctions on Moscow, without waiting for definitive proof.
"He has one last chance to show he means to help," Dutch Prime Minister Mark Rutte said after a telephone call to Putin.
Britain, which lost 10 citizens, said further sanctions were available for use against Russia. "If Russia is the principal culprit, we can take further action against them and make it clear this kind of sponsored war is completely unacceptable," Defense Minister Michael Fallon told the Mail on Sunday.
Prime Minister David Cameron, writing in The Sunday Times, said European countries should make their power count in dealing with the Ukraine crisis, "yet we sometimes behave as if we need Russia more than Russia needs us."
German Chancellor Angela Merkel, the most powerful figure in the EU, spoke to Putin on Saturday, urging his cooperation. Merkel's foreign minister, Frank-Walter Steinmeier, told Bild am Sonntag newspaper: "Moscow may have a last chance now to show that it really is seriously interested in a solution."
"Now is the moment for everyone to stop and think to themselves what might happen if we don't stop the escalation."
Germany, reliant like other EU states on Russian energy and more engaged in Russian trade than the United States, has been reluctant to escalate a confrontation with Moscow that has revived memories of the Cold War. But with military action not seen as an option, economic leverage is a vital instrument.
Russia said on Saturday it was retaliating against sanctions imposed by the United States last week, before the air disaster, by barring entry to unnamed Americans and warned of a "boomerang effect" on U.S. business. But Foreign Minister Sergei Lavrov and U.S. Secretary of State John Kerry did agree in a phone call to try to get both sides in Ukraine to reach a consensus on peace, Russia's Foreign Ministry said.
The State Department, however, put the onus on Russia, saying Kerry urged Russia to take "immediate and clear actions to reduce tensions in Ukraine."
Driving home its assertion that the Boeing 777 was hit by a Russian SA-11 radar-guided missile, Ukraine's Western-backed government said it had "compelling evidence" the battery was not just brought in from Russia but manned by three Russian citizens who had now taken the truck-mounted system back over the border.
The prime minister, denying Russian suggestions that Kiev's forces had fired a missile, said only a "very professional" crew could have brought down the speeding jetliner from 33,000 feet (10,000 meters) - not "drunken gorillas" among the ill-trained insurgents who want the Russian-speaking east to be annexed by Moscow.
Fighting flared in eastern Ukraine on Saturday. The government said it was pressing its offensive in the east.
Observers from Europe's OSCE security agency visited part of the crash site near the village of Hrabove for a second day on Saturday and again found their access hampered by armed men from the forces of the self-declared People's Republic of Donetsk. An OSCE official said, however, they saw more than on Friday.
At one point, a Reuters correspondent heard a senior rebel tell the OSCE delegation they could not approach the wreckage and would simply be informed in due course of an investigation conducted by the separatists. However, fighters later let them visit an area where one of the airliner's two engines lay.
"The terrorists, with the help of Russia, are trying to destroy evidence of international crimes," the Ukrainian government said in a statement. "The terrorists have taken 38 bodies to the morgue in Donetsk," it said, accusing people with "strong Russian accents" of threatening to conduct autopsies.
Ukraine's prime minister said armed men had barred government experts from collecting evidence.
Kerry told Lavrov the United States is "very concerned" over reports that the remains of victims and debris from the crash site have been removed or tampered with, the State Department said. He said Washington was also concerned over denial of "proper access" for international investigators and OSCE monitors, it said.
Ukrainian President Petro Poroshenko urged the United Nations on Saturday to label rebels fighting his forces in the eastern regions of Luhansk and Donetsk as belonging to "terrorist organizations".
In the regional capital Donetsk, the prime minister of the separatist authorities told a news conference that Kiev was holding up the arrival of international experts whose mission to probe the cause - and potentially blame - for the disaster was authorized on Friday by the United Nations Security Council.
And contrary to earlier statements by the rebels, Alexander Borodai said they had not found the black box flight recorders. He said rebels were avoiding disturbing the area.
"There's a grandmother. A body landed right in her bed. She says 'please take this body away'. But we cannot tamper with the site," Borodai said. "Bodies of innocent people are lying out in the heat. We reserve the right, if the delay continues ... to begin the process of taking away the bodies. We ask the Russian Federation to help us with this problem and send their experts."
Midday temperatures are around 30 Celsius (85 Fahrenheit).
At Hrabove, one armed man from the separatist forces told Reuters that bodies had already been taken away in trucks. Another said that immediately after the crash people had looted valuables. But fighters and local people say they have been doing their best to collect evidence and preserve human remains.
As the stench of death began to pervade the area after Thursday's crash, correspondents watched rescue workers carry bodies across the fields and gather remains in black sacks.
Meeting Ukrainian President Poroshenko in Kiev, Dutch Foreign Minister Frans Timmermans said: "We are already shocked by the news we got today of bodies being dragged around, of the site not being treated properly ... People are angry, furious."
The Ukrainian security council in Kiev said staff of the Emergencies Ministry had found 186 bodies and had checked some 18 sq km (seven square miles) of the scattered 25-sq-km (10-square-mile) crash site. But the workers were not free to conduct a normal investigation.
"The fighters have let the Emergencies Ministry workers in there but they are not allowing them to take anything from the area," security council spokesman Andriy Lysenko said. "The fighters are taking away all that has been found."
Malaysia, whose national airline has been battered by its second major disaster this year, said it was "inhumane" to bar access to the site around the village of Hrabove, but said Russia was doing its "level best" to help.
A team of Malaysian experts flew in to Kiev on Saturday and experts from Interpol are due there on Sunday to help with the identification of victims. Dutch, U.S. and a host of other specialists are being lined up to help in the investigation.
As tales of personal grief unfolded, Malaysian Prime Minister Najib Razak revealed his own family was involved - his 83-year-old step-grandmother had been aboard the flight.
The United Nations said 80 children were aboard. The deadliest attack on a commercial airliner follows the disappearance of flight MH370 in March with 239 passengers.
Malaysia Airlines has defended its use of the route, 1,000 feet (300 meters) above the area closed by Ukraine due to the hostilities. Some airlines had been avoiding the area, though many others were flying over. The issue has raised questions of liability for the deaths and damage and about international supervisors' roles.
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. (Additional reporting by Pavel Polityuk and Elizabeth Piper in Kiev, Peter Graff in Donetsk, Siva Govindasamy and Al-Zaquan Amer Hamzah in Kuala Lumpur, Costas Pitas in London, and Eric Beech in Washington; Writing by Alastair Macdonald; Editing by Andrew Heavens, Sonya Hepinstall and Mohammad Zargham)
07/25/2014 11:29 PM EDT
Document: EU Extends Russia Sanctions
A document shows that EU sanctions ar targeting Russian businesses, the AP reports:
A European Union document shows that among those targeted by the EU-wide asset freeze and travel ban are Alexander Bortnikov, head of the Russian Federal Security.
Also targeted is Sergei Beseda, head of the FSB service that oversees international operations and intelligence activity.
07/25/2014 5:21 PM EDT
AP Journalists Saw Rebels With BUK Missiles Hours Before MH17 Crashed
Associated Press journalists in Ukraine saw a BUK missile system -- the type that the US says downed Flight MH17 -- in rebel hands just hours before the plane was shot down, the news agency says in detailed account of the day's events. AP says that while the rebels officially deny responsibility, "the denials are increasingly challenged by accounts of residents, the observations of journalists on the ground, and the statements of one rebel official." Further, one rebel official told AP that they were behind the plane tragedy.
More from the AP story:
A highly placed rebel, speaking to the AP this week, admitted that rebels were responsible. He said a unit based in the hometown of ousted President Viktor Yanukovych, made up of both Russians and Ukrainians, was involved in the firing of an SA-11 from near Snizhne. The rebel, who has direct access to the inner circle of the insurgent leadership in Donetsk, said that he could not be named because he was contradicting the rebels' official line.
The rebels believed they were targeting a Ukrainian military plane, this person said. Instead, they hit the passenger jet flying from Amsterdam to Kuala Lumpur. All 298 people aboard were killed.
Read the full account here.
07/25/2014 2:59 PM EDT
White House: Russia 'Culpable' For Downed Jet
In a briefing on Friday, the White House Press Secretary Josh Earnest said there has been a "steady flow" of weapons from Russia into Ukraine, and emphasized the position that Russia played a role in the shooting down of the Malaysia Airlines flight MH17 in eastern Ukraine, the Wall Street Journal's Marketwatch reports.
Russia 'culpable' for Malaysia Air jet downed in Ukraine: White House http://t.co/bJR9bYh7js— MarketWatch (@MarketWatch) July 25, 2014
The Pentagon said on Friday that the transfer of missile systems from Russia to separatists in Ukraine appeared to be imminent. On Thursday, the U.S. claimed that Russia had fired on Ukrainian military positions.
07/25/2014 1:54 PM EDT
Ukrainian Security Release Tape Of Rebels Allegedly Discussing MH17
Ukraine's security service, SBU, on Friday released a recording it said was of a phone call between pro-Russian separatists discussing a plane overhead, minutes before the Malaysian Airlines jet was shot down over east Ukraine. “I see… Roger... Report it upstairs,” the rebel commander says, according to a translation.
Writing for Mashable, Christopher Miller notes that the recording has not been authenticated and the commander "stops short of giving the order to shoot down Flight 17," however the implication is clearly to build a case that the rebels shot down the plane.
07/25/2014 1:14 PM EDT
Russia Accuses U.S. Of 'Smear Campaign' Over Ukraine
Responding to U.S. officials assertion that Russia was firing artillery on Ukrainian military positions across the border, Russia on Friday countered by calling the claim a baseless "smear campaign,"AFP reports.
A statement from the Russian foreign ministry said, "Due to the smear campaign against us that the US Administration has begun... we reject the unfounded public insinuations that US deputy State Department spokeswoman Marie Harf is spreading on a daily basis," adding that Harf has used "a basketful of these anti-Russian cliches," to influence perceptions of Russia. The statement refuted the U.S. State Departments claim on Russia targeting Ukraine military, saying "There are no facts or specifics about these falsehoods."
More from AFP.
-- Andrew Hart
07/25/2014 1:06 PM EDT
U.S. Ambassador: 15,000 Russian Troops At Border
#BREAKING: More than 15,000 Russian troops amassed along border with Ukraine: U.S. ambassador to NATO— Reuters Top News (@Reuters) July 25, 2014
07/25/2014 12:58 PM EDT
More On The Remarks Out Of The Pentagon
The Pentagon said on Friday the transfer of heavy caliber multiple launch rocket systems from
Russia to Ukrainian separatists appeared to be imminent, with the arms close enough to the border they could be handed over "potentially today."
"We have indications that the Russians intend to supply heavier and more sophisticated multiple launch rocket systems in the very near future," said Army Colonel Steve Warren, a Pentagon spokesman, adding that the weapons were in the over-200mm range.
Warren indicated the weapons had been seen getting closer to the border and the Pentagon believed a transfer was imminent and "potentially today."
"We believe that they are able to transfer this equipment at any time, at any moment," he said.
07/25/2014 12:45 PM EDT
Pentagon Says Russia Is Readying Weapons For Transfer To Ukraine Rebels
Pentagon: Russia readying powerful weapons for rebels in Ukraine, transfer could happen any time. http://t.co/xZnfkBUWSV— CNN Breaking News (@cnnbrk) July 25, 2014
07/25/2014 11:34 AM EDT
Australia To Send 100 Additional Police and Personnel To Secure Crash Site
(Reuters) - Australia will send 100 additional police and some defense force personnel to Europe to join a planned Dutch-led international security force to secure the Malaysia Airlines Flight MH17 crash site, Prime Minister Tony Abbott said on Friday.
The Australian Federal Police (AFP) officers, some of whom will be armed, will join a contingent of 90 AFP officers already in London waiting for a deal with Ukrainian President Petro Poroshenko to be approved by Ukraine's parliament.
"This is a humanitarian mission, with a clear and simple objective," Abbott told reporters. "I expect the operation on the ground in Ukraine, should the deployment go ahead, to last no longer than a few weeks."
Read the full story here.
07/25/2014 11:03 AM EDT
Russian Newspaper Runs Front Page Apology For MH17
A leading Russian newspaper has issued an apology on its front page, asking for forgiveness from the people of the Netherlands who lost their loved ones in the Malaysian Airlines plane crash. The front page of Novaya Gazeta on Friday featured the words "Vergeef ons, Nederlands" (Forgive Us, Netherlands) in bold above a heartbreaking image of the line of hearses carrying MH17 victim's bodies.
Read the full story on the Huffington Post here.