Footage was uploaded to YouTube allegedly showing the smoking wreckage left by the Malaysia Airlines passenger plane.
The clip showed a residential area in Ukraine while plumes of black smoke reaching to the sky can be seen in the background.
There has been firing in the region yesterday when a Ukrainian war plane was shot down.
Russia angrily denied reports it was to blame for the attack on a Ukrainian airforce SU-25 earlier today, which happened just miles from the latest air disaster.
The pilot of the downed fighter jet ejected and was later evacuated by Ukrainian forces, said Kiev sources.
"A military plane from the air force of the Russian Federation carried out a rocket strike on a Ukrainian air force SU-25 as it fulfilled its task over the territory of Ukraine," said Kiev's National Security and Defence Council .
Malaysia Airlines has lost contact of MH17 from Amsterdam. The last known position was over Ukrainian airspace. More details to follow.