European airlines were told Thursday to avoid Ukraine's airspace after a Malaysia Airlines plane crashed in the east of the country.

In France, a statement by junior transport minister Frederic Cuvillier said he had advised "French airlines to avoid Ukraine's air space as long as the reasons behind this catastrophe are not known."

President Barack Obama and Russian President Vladimir Putin spoke by phone on Thursday about tough new sanctions imposed on Moscow on Ukraine.

White House spokesman Josh Earnest did not divulge other topics of the conversation. The Kremlin however said that the two leaders discussed the reported crash of a Malaysian airliner in eastern Ukraine.

Russia on Thursday dismissed as absurd Kiev's claims that it had shot down a Ukrainian warplane over its territory, a move that led to a fresh spike in tensions between the two ex-Soviet states.

"This is absurd, just like all previous accusations against the Russian defense ministry by Kiev authorities," an unidentified high-ranking representative of the defense ministry told the Interfax news agency.

Eighteen Ukrainians with shrapnel wounds were hospitalized in Russia after fleeing from the conflict-torn east of their country, the health ministry said Thursday, adding that one has died.

Russian media reported that the Ukrainians drove up to two border posts Wednesday waving white flags and asked to be let in for medical treatment.

The U.S. and EU bolstered sanctions against Russia over its alleged support of separatists in Ukraine, drawing an angry rebuke on Thursday from Moscow which said the measures amounted to "blackmail".

President Barack Obama in sanctions imposed Wednesday took his first direct swipes at the Russian economy's finance, military and energy sectors, further escalating the worst standoff between the Kremlin and the West since the Cold War.

Russian President Vladimir Putin warned on Thursday that Washington's new biting sanctions against his country will boomerang and hit back at U.S. national interests.

"Without any doubt in this case (sanctions) are driving Russian-U.S. relations towards a dead-end, (and) are inflicting very serious damage on them," the state news agency ITAR TASS quoted Putin as saying while on a visit to Brasilia.

Rebel leaders in eastern Ukraine will hold a videoconference Thursday with a group of mediators to discuss talks on a possible truce, a top separatist chief said Wednesday.

Plans for similar Internet negotiations between the separatists and a trilateral Contact Group involving representatives of Ukraine, Russia and the OSCE fell through Tuesday leading negotiators to slam the rebels for not being committed to talks.

When young mother Natasha woke up to find her quiet suburb suddenly on the frontline of fighting between Ukrainian troops and pro-Moscow rebels -- she knew it was time to pack up her three kids and get out.

Now they're waiting anxiously in line with over a hundred others, mainly women, children and elderly from around the main rebel-held city of Donetsk for a bus put on by the separatist authorities to ferry them across the border to Russia.

Russian actions to resolve the Ukraine conflict have been insufficient so far, a German government spokesman said Wednesday ahead of an EU summit that will consider fresh sanctions against Moscow.

German Chancellor Angela Merkel and Ukraine President Petro Poroshenko had agreed in a phone call Tuesday that "Russia has been insufficient in meeting expectations" on steps to end the fighting between government forces and pro-Russian separatists, said Merkel's spokesman.

Mediators on the Ukraine crisis have accused pro-Russian rebels of not being committed to truce negotiations after a planned video-conference to discuss talks fell through.

A discussion meant to be held Tuesday between the trilateral Contact Group -- which includes representatives of Ukraine, Russia and the OSCE -- and separatist leaders "did not materialize" meaning that no talks have happened since late June, the group said in a statement.