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MH17 Investigators Dodge Ukraine War as More Remains Found (2)

Aug. 2 (Bloomberg) -- Investigators began searching the wreckage of Malaysian Air Flight MH17 after two weeks of delays, finding more body parts and personal effects of victims as the pro-Russian revolt in eastern Ukraine raged on around them.

Dozens of forensics experts, mainly Dutch and Australian, followed scouts on a four-hour journey from the regional capital, Donetsk, to a chicken farm near the village of Grabovo where the bulk of the fuselage came down on July 17, according to Pieter-Jaap Aalbersberg, head of the recovery mission.

“A number of human remains were found,” Aalbersberg said in an e-mailed statement yesterday. They will be put in refrigerated rail cars and sent to the Ukrainian city of Kharkiv before being flown to the Netherlands. A total of 227 coffins with remains of victims have already been returned. About two- thirds of the 298 people who died on the plane, which was flying from Amsterdam to Kuala Lumpur, were Dutch.

The U.S. and Ukraine say the Boeing Co. 777 was most probably brought down by a missile fired by pro-Russian insurgents amid months of fighting that’s claimed more than 1,000 lives. Both Russia and the rebels blame Ukrainian forces.

The recovery effort will include four teams of 20 experts each over the weekend, with a fifth joining in a few days, when divers and sniffer dogs may be deployed, Aalbersberg said. The mission will take weeks to complete.

Drone Downed

Rebels shot down a drone operated by government forces over the east of Ukraine yesterday, Defense Ministry spokesman Andriy Lysenko said in a televised briefing in Kiev today. The separatists used a Buk surface-to-air missile system similar to the one believed to have shot down MH17, he said.

Ukrainian forces also took control of two villages close to Donetsk as they advanced on the city, he said.

U.K. Prime Minister David Cameron put NATO’s relationship with Russia at the top of the agenda for the alliance’s summit in Wales next month, outlining proposals for military exercises, an improved joint response force and the stationing of equipment and supplies in eastern Europe.

“Six months into the Russia-Ukraine crisis, we must agree on long-term measures to strengthen our ability to respond quickly to any threat, to reassure those allies who fear for their own country’s security and to deter any Russian aggression,” Cameron wrote in a letter to fellow leaders of the bloc.

Obama, Putin

Presidents Barack Obama and Vladimir Putin spoke by phone about the deepening crisis yesterday, during which Obama “reiterated his deep concerns about Russia’s increased support for the separatists,” the White House said in a statement.

Putin said the sanctions imposed against Russia as a result of the crisis in Ukraine have done “serious damage” to international relations, according to the Kremlin. Both sides stressed the importance of establishing an “immediate, sustainable cease-fire” to begin peace talks, the Kremlin said.

Ukrainian President Petro Poroshenko, who was elected after his Russian-backed predecessor, Viktor Yanukovych, was deposed following months of protests in February, reiterated in a television interview that Ukraine won’t negotiate over territory, including Crimea, which Russian annexed in March.

Russia has repeatedly denied any involvement in the conflict. The U.S. and its European Union allies, though, blame Putin for failing to rein in the insurgency and stop the war.

Banks Hit

The EU blacklisted state-run Russian banks OAO Sberbank, VTB Bank, Gazprombank, Vnesheconombank and Rosselkhozbank two days ago, barring them from selling shares or bonds in Europe as punishment for Putin’s policies in Ukraine. That’s part of the 28-nation bloc’s deepest sanctions yet, announced July 29, that include restrictions on the exports of equipment for Russia’s oil industry and curbs on arm sales.

Group of Seven countries will vote against approving new World Bank projects in Russia as punishment over Ukraine, according to three government officials with knowledge of the agreement. The action, which puts at least $1.5 billion of possible projects at risk, was decided by deputy finance ministers from the G-7 during a conference call last week, according to two of the officials, who spoke on the condition of anonymity because the call wasn’t public.

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