Anton Gerashenko, an adviser to Ukraine's interior minister, said on his Facebook page the plane was flying at an altitude of 10,000 meters (33,000 feet). He also said it was hit by a missile fired from a Buk launcher, which can fire missiles up to an altitude of 22,000 meters (72,000 feet).
The fate of the passengers wasn't immediately known.
Ukrainian President Petro Poroshenko said his country's armed forces didn't shoot at any airborne targets.
"We do not exclude that this plane was shot down, and we stress that the Armed Forces of Ukraine did not take action against any airborne targets," he said. "We are sure that those who are guilty in this tragedy will be held responsible."
Malaysia Airlines said on its Twitter feed that it "has lost contact of MH17 from Amsterdam. The last known position was over Ukrainian airspace." The plane's destination was Kuala Lumpur.
It was the second time that a Malaysia Airlines plane was lost in less than six months. Malaysia Airlines Flight 370 disappeared in March while en route from Kuala Lumpur to Beijing. It has not been found, but the search has been concentrated in the Indian Ocean far west of Australia.
The Donetsk region government said Thursday's plane crashed near a village called Grabovo, which it said is currently under the control of armed pro-Russian separatists. The region where the flight was lost has seen severe fighting between Ukrainian forces and pro-Russia separatist rebels in recent days.
A launcher similar to the Buk missile system was seen by Associated Press journalists near the eastern Ukrainian town of Snizhne earlier Thursday.
On Wednesday evening, a Ukrainian fighter jet was shot down by an air-to-air missile from a Russian plane, Ukrainian authorities said Thursday, adding to what Kiev says is mounting evidence that Moscow is directly supporting the separatist insurgents in eastern Ukraine. Security Council spokesman Andrei Lysenko said the pilot of the Sukhoi-25 jet hit by the air-to-air missile was forced to bail after his jet was shot down.
Pro-Russia rebels, meanwhile, claimed responsibility for strikes Wednesday on two Ukrainian Sukhoi-25 jets. The Ukrainian Defense Ministry said the second jet was hit by a portable surface-to-air missile, but added the pilot was unscathed and managed to land his plane safely
Moscow denies Western charges that is supporting the separatists or sowing unrest in its neighbor. The Russian Defense Ministry couldn't be reached for comment Thursday about the Ukrainian jet and Russia's foreign ministry didn't respond to multiple requests for comment.
Earlier this week, Ukraine said a military transport plane was shot down Monday by a missile fired from Russian territory.
The Malaysia Airlines plane is a Boeing 777-200ER, which was delivered to Malaysia Airlines on July 30, 1997, according to Flightglobal's Ascend Online Fleets, which sells and tracks information about aircraft. It has more than 43,000 hours of flight time and 6,950 takeoffs and landings.
If the plane was shot down, it would be the fourth commercial airliner to face such a fate. The previous three were:
— April 20, 1978: Korean Airlines Flight 902, which diverted from its planned course on a flight from Paris to Seoul and strayed over the Soviet Union. After being fired upon by an interceptor aircraft, the crew made a forced landing at night on the surface of a frozen lake. Two of the 97 passengers were killed by the hostile fire.
— Sept. 1, 1983: Korean Air Lines Flight 007 shot down by at least one Soviet air-to-air missile after the 747 had strayed into Soviet airspace. All 240 passengers and 29 crew were killed.
— July 3, 1988: Iran Air Flight 655 Aircraft was shot down by a surface to air missile from the American naval vessel U.S.S. Vincennes. All 16 crew and 274 passengers were killed.
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