(Updates with reported agreement on security zone in fourth paragraph after Ukraine Denial sub-headline. For more news on Flight 17, see EXT2.)
July 19 (Bloomberg) -- President Barack Obama said the U.S. has concluded that a surface-to-air missile launched from insurgent-held territory in eastern Ukraine brought down a Malaysia Airlines jetliner, as that country’s conflict takes a toll on lives far beyond its borders.
The disaster that killed all 298 people on the commercial flight has spurred anger among nations whose citizens were lost. Malaysia is sending its transport minister to Kiev today as it called for investigators to be allowed access to the crash site, while Australia’s foreign minister will go to New York to seek a binding United Nations resolution on an independent probe.
“Their deaths are an outrage of unspeakable proportions,” Obama said yesterday at the White House. Russia continues to refuse to “de-escalate the situation” in the region, he said, calling for an immediate cease-fire in Ukraine.
The U.S. is raising pressure on Russia to end support for the rebels as the UN Security Council held an emergency meeting over the catastrophe and members of Congress called for yet more U.S.-ordered economic sanctions against Russia in retaliation for the downing of the airliner.
Russia’s ambassador to the UN, Vitaly Churkin, told the 15- member council yesterday that the U.S. is pushing Ukraine to escalate tensions and Russia “places all blame on Kiev.” He questioned why Ukraine allowed a civilian plane to fly over the conflict zone and called for an impartial investigation.
The crash of the Malaysian plane has intensified the world’s focus on the months-long conflict in Ukraine, Europe’s biggest crisis since the Cold War. President Vladimir Putin, who’s denied Russian involvement in the fighting in Ukraine, said the government in Kiev bore responsibility for the crash because it wouldn’t have occurred without the strife that has pitted separatists against regular forces in two eastern regions of the country.
The attack on the plane made the conflict in the former Soviet republic a “world-wide problem,” Ukrainian Premier Arseniy Yatsenyuk said in an interview on Bloomberg Television.
“This war can be ended,” U.S. Ambassador to the UN Samantha Power told told the council. “Russia can end this war and Russia must end this war.”
Most European stocks fell amid concern that the confrontation over Ukraine is deepening. The Stoxx Europe 600 Index lost less than 0.1 percent to 339.66 at the close in London as three stocks fell for every two that climbed. Russia’s Micex Index slid 1.3 percent, extending its weekly drop to 5.2 percent, the biggest decline since April.
In New York, stocks jumped with the Standard & Poor’s 500 Index rebounding from its worst drop since April. The S&P 500 rose 1 percent to 1,978.22 at the close. The Dow climbed 123.37 points, or 0.7 percent, to 17,100.18.
Obama accused Russia of providing a “steady flow of support” to insurgents battling the Ukrainian government, including arms, training and heavy weapons.
“At least one American citizen, Quinn Lucas Schansman, was killed” in the plane crash, Obama said. Schansman was a dual Dutch-U.S. citizen, Jen Psaki, spokeswoman for the U.S. State Department, said on her Twitter account. He had been living in Amsterdam since April, according to his Facebook account.
As moves to investigate the air disaster started, Ukraine’s state security service said it intercepted phone conversations among pro-Russian militants discussing a missile strike that knocked the Boeing Co. 777 -- Flight MH17 from Amsterdam to Kuala Lumpur -- out of the sky 50 kilometers (30 miles) from the Russian border on July 17.
Monitors from the Organization for Security and Cooperation in Europe were hindered by gunmen and failed to gain full access to the wreckage site, Thomas Greminger, Switzerland’s OSCE ambassador, told reporters in Vienna.
Andrei Purgin, a deputy premier of the rebels’ self- declared Donetsk People’s Republic, on July 17 denied the rebels were behind the attack, saying the Ukrainian army shot down the plane by mistake. He also said the separatists didn’t have a weapon that could reach that altitude.
Ukraine’s Defense Ministry said on its website July 17 that the army hadn’t used missiles in its operation against the separatists. The army “did not fire a single rocket” it said.
Ukraine has already lost multiple aircraft to the rebels. Earlier this week, the government said an An-26 transport plane was hit by a “powerful weapon” not previously used by the separatists, which probably was fired from inside Russia.
Ukrainian emergency services have found the Malaysian jetliner’s blackboxes at the crash site, Kostyantyn Batozsky, an adviser to the head of the Donetsk regional administration appointed by President Petro Poroshenko, told reporters in a phone briefing yesterday, though he was unable to give details of their current location.
Pro-Russia rebels have agreed to set up a 20-kilometer “security zone” around the crash site, Sky News reported on its website, citing televised remarks by the head of Ukraine’s security service.
Retrieval of the plane’s blackboxes hasn’t been confirmed and clearance hasn’t been given to the crash site, Malaysian Transport Minister Liow Tiong Lai said today in Sepang, outside Kuala Lumpur. The priority is to ensure plane debris isn’t tampered with, Defense Minister Hishammuddin Hussein said, calling for international cooperation in the probe.
Australian Prime Minister Tony Abbott said today it is “absolutely vital” that an independent international investigation begins as soon as possible, and to identify and recover all Australian victims. The country is also sending officials to Kiev, including investigators and a five-member emergency response team.
Australian Foreign Minister Julie Bishop, who will leave for New York tonight, said she understood that China supports a statement calling for the UN resolution, while Russia has supported a press statement, even as its attitude toward particular aspects of the binding resolution are unknown.
The Chinese Ministry of Foreign Affairs hasn’t responded to an e-mail and a fax from Bloomberg News today seeking comments. Chinese President Xi Jinping said yesterday that he hopes a fair and objective probe will be carried out, Xinhua news agency reported.
A total of 181 bodies have been recovered from the crash site, and the remains will be sent to the eastern Ukrainian city of Kharkiv, Foreign Ministry spokesman Andrii Sybiga told reporters in Kiev yesterday.
The disaster happened a day after the U.S. imposed further sanctions on Russia over the conflict. Obama threatened to escalate those economic restrictions, even as he ruled out a role for U.S. military forces.
He called the crash a “wake-up call for Europe,” which is divided over how much to penalize Russia during the crisis, fearing that stricter sanctions would cut off the crucial flow of natural gas to their nations.
U.S. Representative Jim Gerlach, a Pennsylvania Republican and co-chairman of the Congressional Ukrainian Caucus, said a proposed Russian natural gas pipeline under consideration by the European Union “should immediately be scrapped.”
He said the U.S. and EU should also “renew discussions with Poland and the Czech Republic about deploying anti-missile defense systems in those countries to deter and contain Russian hegemony.”
Representative Tom Price, a Georgia Republican, said in a statement: “There’s no mistaking that Russia’s aggressive posture and efforts to carve apart a neighboring nation have led to the violence and instability that has now resulted in such a horrific loss of innocent life.” If it’s proven that Russian- backed separatists shot the plane down, “there can be no abiding excuses from Russia’s leaders,” he said.
The EU yesterday took a legal step to sanction companies -- including some from Russia -- over the conflict in Ukraine. The bloc will announce its first list of targeted entities by the end of this month following an agreement reached by EU leaders on July 16, according to a statement.
German Chancellor Angela Merkel told reporters in Berlin she was issuing a “very clear call for the Russian president and the Russian government to assume their responsibility to ensure that there’s a political solution” to the Ukrainian conflict. She urged creation of a “verification regime” to ensure weapons aren’t being moved across the Russia-Ukraine frontier.
Obama yesterday talked with Merkel and U.K. Prime Minister David Cameron about Ukraine and the downing of the airliner, Ben Rhodes, Obama’s deputy national security adviser, said via Twitter. Merkel and Obama pledged “to remain in close contact as they consider what additional actions may be required” against Russia, according to a White House statement.
The U.S. president also spoke with Australia’s Abbott, discussing “the need for immediate access by international investigators to the crash site,” and “the importance of a prompt, full, unimpeded and transparent international investigation,” according to a White House statement.
Flight 17 carried 283 passengers and 15 crew members, according to a tally by the airline. The bulk of the passengers -- 192 -- were from the Netherlands, including one with dual U.S.-Dutch citizenship. There were 44 Malaysians on board, including crew, with 27 Australians the next largest group, as well 12 passengers from Indonesia, 10 from the U.K., and others from Germany, Belgium, the Philippines, Canada, New Zealand. One of the passengers from the U.K. had a dual South African citizenship.
Away from the crash site, fighting continued in eastern Ukraine. More than 20 civilians were killed yesterday when the center and surrounding districts of the eastern city of Luhansk were shelled, the city government said.
Three government soldiers were killed in fighting and 25 wounded in the prior 24 hours, Defense Ministry spokesman Andriy Lysenko said in Kiev yesterday. He said government forces had been attacked 19 times by rebels during the period.
Flight 17 was at about 33,000 feet (10,000 meters), taking a route over eastern Ukraine that several other carriers have been avoiding. The flight was at an altitude cleared for commercial traffic, according to navigation agency Eurocontrol.
It was the second major disaster for Malaysian Airline System Bhd. this year. Flight 370 vanished with 239 people on board in March en route to Beijing from Kuala Lumpur, sparking what has become the world’s longest search for a missing jetliner in modern aviation history.
Pilots were instructed by Ukraine’s air traffic control to fly at 33,000 feet upon entering its air space after filing a flight plan requesting to proceed at 35,000 feet, the carrier said in a statement yesterday.
Ukraine’s air-traffic control service has now closed down the airspace above regions where fighting has been taking place, according to a statement on its website. Flights aren’t being allowed above the Donetsk and Luhansk regions and part of the Kharkiv region.
U.S. military and intelligence agencies said that while they’re still investigating, it increasingly appears Flight 17 was downed by a Russian-made surface-to-air missile known by its NATO designation SA-11 Gadfly.
The Federal Bureau of Investigation will advise an investigation into the crash and send an explosives specialist to Ukraine, according to a U.S. law-enforcement official, who asked not to be identified in accordance with the agency’s policy.
The Gadfly, known locally as the Buk-M, is a radar-guided weapon that can find a target at a range of 140 miles and reach altitudes as high as about 72,000 feet, according to the army- technology.com website.
“This is not a war between just Ukraine and Russia,” Yatsenyuk said in the Bloomberg TV interview. “This is a crime against humanity. We all have to realize that we have to stop this mess. After the tragedy, this is not a local conflict. This is a world-wide problem that needs to be fixed and resolved.”
--With assistance from Henry Meyer, Anna Andrianova, Anatoly Medetsky and Ilya Arkhipov in Moscow, Nicole Gaouette, John Walcott, Tony Capaccio, Del Quentin Wilber, Angela Greiling Keane and Derek Wallbank in Washington, Michael Sasso in Atlanta, Leon Mangasarian and Arne Delfs in Berlin, Robert Hutton, Thomas Penny and Ryan Chilcote in London, Daryna Krasnolutska in Kiev, Alexander Weber in Vienna, Niluksi Koswanage and Shamim Adam in Kuala Lumpur, Nichola Saminather in Sydney, Feifei Shen in Beijing and Jake Lloyd-Smith and Glenys Sim in Singapore.