Heavy shelling around the crash site of downed Malaysian flight MH17 forced Dutch and Australian police to scrap a planned visit as they sought to secure the scene 10 days after the disaster.

The unarmed contingent of law enforcement officers were due to head to the location after a deal was struck with rebels aimed at allowing a long-delayed probe into the tragedy to go ahead.

But international observers overseeing the trip had to abruptly ditch their plans after clashes shattered a supposed truce between government forces and insurgents in the area around the site, where some remains of the 298 victims still lie decomposing under the summer sun.

"There is fighting going on. We can't take the risk," said Alexander Hug, deputy chief monitor of the European security body OSCE's special mission in Ukraine.

"The security situation on the way to the site and on the site itself is unacceptable for our unarmed observer mission," he told reporters in the insurgent stronghold Donetsk, the biggest city in the region.

An AFP photographer heard artillery bombardments just a kilometre (half a mile) from the rebel-held town of Grabove next to the crash site and saw black smoke billowing into the sky.

Terrified local residents were fleeing and checkpoints controlled by separatist fighters were abandoned.

The Dutch justice ministry confirmed that security advisers had halted their team from visiting the site.

"The team of 30 Dutch forensic experts currently has no safe access to the disaster site. Because of fighting in the area, the situation is still too unstable to work at the crash site," the ministry said in a statement.

Earlier Australian Prime Minister Tony Abbott said 49 officers from The Netherlands and Australia -- which together lost some 221 citizens in the crash -- were due at the scene Sunday and that there would be "considerably more on site in coming days."

That came after Malaysian Prime Minister Datuk Seri Najib Razak said he had reached an agreement with the pro-Russian insurgents controlling the site to allow the police deployment.

"I hope that this agreement ... will ensure security on the ground, so the international investigators can conduct their work," Najib Razak said, adding that 68 Malaysian police personnel would leave Kuala Lumpur for the crash site on Wednesday.

So far investigators have been able to visit the site only sporadically because of security concerns.

A truce had been called in the immediate area around the site by both the Kiev forces and pro-Russian separatists, but just 60 kilometres (35 miles) away, the Ukrainian army had continued with their offensive to retake Donetsk.

The industrial hub, which has been serving as a base for international monitors and journalists who are travelling daily to the crash site, came under intense fire overnight.

The sounds of heavy bombardment -- some of it apparently unguided Grad rocket fire -- could be heard throughout the night in Donetsk and there were bursts of gunfire in the deserted city centre.

'She was full of life'

The insurgents have also handed over a sealed train carriage filled with victims' belongings to Dutch authorities, who are leading the probe into downing of the plane -- allegedly by the rebels.

Ignoring safety warnings, an Australian couple travelled to the scene of the crash without any escort Saturday, saying they were fulfilling a promise to their only child that they would be there.

"She was full of life," said Angela Rudhart-Dyczynski of their 25-year-old daughter Fatima, an aerospace engineering student who died when the Amsterdam-to-Kuala Lumpur plane was downed.

Brussels mulls more sanctions

In Brussels, the European Union is drafting tougher sanctions against Russia -- which it accuses of abetting the insurgency by arming the rebels who allegedly shot down the aircraft.

Sanctions targeting economic sectors including an arms embargo are being considered, while on Tuesday the bloc is expected to unveil more names of individuals and entities sanctioned.

Moscow has blasted the move as "irresponsible", and warned that it jeopardised cooperation on security issues.

Meanwhile in Kiev, lawmakers are to meet next week to discuss Prime Minister Arseniy Yatsenyuk's future, after the premier quit in fury over the collapse of his coalition.

President Petro Poroshenko has insisted on Yatsenyuk's cooperation until new elections are held.

The Fatherland faction of ex-prime minister Yulia Tymoshenko condemned the coalition's collapse, saying it "opens up a second front" as the country battles to quell the eastern insurgency.

About 1,000 people -- including the victims from the Malaysian plane crash -- have been killed in the deadly insurgency, and the United Nations estimates that some 230,000 have fled their homes.

The Red Cross has said the country is now in a civil war -- a classification that would make parties in the conflict liable to prosecution for war crimes.