Ukrainian and Western authorities say the plane was downed by a missile fired either by rebels or Russian troops who allegedly back them.
The rebels and Moscow say it was hit by a Ukrainian warplane or a Ukrainian-fired missile.
In Hrabove, about 200 residents carrying flowers gathered in a church for a memorial service and procession to nearby fields organized by local leaders and the Russia-backed separatist rebels who control the area.
The procession mainly consisted of women and children, who carried icons and chanted Orthodox liturgical music. The perimeter of the procession was guarded by men in Soviet military uniforms. About 100 people carried the flags of the countries of the victims as well as the separatist flags stood by a small stone at the crash site which bore a plaque saying: "To the memory of 298 dead, innocent victims of the civil war."
In Canberra, Australian Prime Minister Tony Abbott honored the 38 Australian citizens and permanent residents aboard the flight as he unveiled a plaque set in soil that a police officer brought back from Ukraine.
"He knew that the place where MH17 came to rest was sacred and that a piece of it should come back to Australia," Abbott said. "It was a humane and decent thing for him to know and do. It was a contrast to the savagery that brought down the plane."
Abbott and his wife laid a wreath at the base of the plaque. Dozens of family members of the victims followed, many in tears as they added their flowers alongside the wreath. Some kissed the bouquets before they placed them, others kissed their fingers and pressed them against the plaque.
Australia, Belgium, Malaysia, the Netherlands and Ukraine have asked the U.N. Security Council to establish an international criminal tribunal to prosecute those responsible for shooting down the plane.
Russia, which holds a veto on the Security Council, opposes setting up a tribunal. Russian President Vladimir Putin on Thursday said that setting up a tribunal would not make sense while the investigation continued.
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