A truce has been called in the area surrounding the site by both Kiev and pro-Russian separatists, but fierce combat was ongoing just 60 kilometres away, with loud explosions heard at regular intervals in a suburb of Donetsk.     

Nine people were also reported killed and 29 wounded in the last 24 hours in another rebel holdout, Lugansk.

As the military pressed on with its offensive to wrest back control of the industrial east, politicians in Kiev were battling to limit the fallout of Prime Minister Arseniy Yatsenyuk's abrupt resignation on Thursday.

Lawmakers are to meet in a special session next week to discuss the Prime Minister's future. President Petro Poroshenko has insisted on Yatsenyuk's cooperation until new elections are held.

In a sign that the political upheaval in the cash-strapped country is ringing alarm bells, IMF chief Christine Lagarde reminded Poroshenko of the reforms Kiev had pledged to undertake in exchange for its USD 17-billion two-year financial lifeline.

The Fund had previously forecasted that Ukraine's economy would contract by 6.5 percent this year due to the insurgency engulfing the country's east.

The other protagonist in the Ukraine conflict -- Russia -- is also hurting economically and widely expected to sink into recession.

Russia, accused by the West of abetting the insurgency by arming the rebels who allegedly shot down MH17, moved to raise its benchmark rate on Friday in what appeared an attempt to shield the economy from tightening Western sanctions.

The European Union has moved to punish Russia by placing heads of intelligence services on an extended sanctions list.

The 28-member EU is also prepared from next week to impose sector wide sanctions including embargoes on arms sales and access to financial markets, all of which could seriously hurt Russia.

Some 227 bodies out of a total of 298 people killed in the crash have been handed over to Dutch authorities, but many more remains lie under the sweltering heat on the vast crash site.

Some 40 plain-clothes military police from the Netherlands, which is leading the investigation after 193 of its citizens were killed in the downed plane, have arrived in Ukraine and are expected to begin their work escorting forensic experts to the MH17 crash site.

The Netherlands also said troops had been consigned to barracks and had leave cancelled ahead of the possible mission to secure the site.

Australia, which lost 28 citizens in the disaster, meanwhile is sending 190 police, along with a small number of its defence forces to join the mission.

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