PETROPAVLIVKA, July 17 - Villagers held a vigil Sunday at the site in eastern Ukraine where Flight MH17 was shot down two years ago, as bereaved relatives marked the anniversary with emotional memorial services, AFP reported.

The Malaysia Airlines passenger jet was hit by a surface-to-air missile on July 17, 2014, during heavy fighting between Kiev's armed forces and pro-Russian separatists, killing all 298 people on board.

The Boeing 777 was on a routine flight between Amsterdam and Kuala Lumpur and two thirds of the passengers were Dutch.

An international inquiry concluded last October that the plane was downed by a Russian-made BUK missile fired from a zone held by pro-Russian separatists, but stopped short of saying who was responsible.

Initial findings of a Dutch-led criminal inquiry are expected to be presented later this summer.

Around 60 people gathered at the crash site in the village of Petropavlivka, carrying flowers and lighting candles at the square where some of the victims' remains and belongings fell to the ground.

Some youngsters from the village – still controlled by pro-Russian separatists fighting pro-Western government forces – also carried paper planes in memory of children killed in the downing of the jet.

"Some of the relatives of people who were killed phoned us and asked us to find things that were valuable for them, for example, the toys that belonged to children aboard," village council head Natalia Voloshina told AFP.

Some small pieces of wreckage, not yet handed over to Dutch investigators, were stacked outside Voloshina's office to mark the anniversary.

Lawyers representing families of the 196 Dutch victims told AFP on Sunday that a majority had reached an agreement with Malaysia Airlines for compensation.

"Talks are still ongoing for the rest of the victims' relatives," Amsterdam-based lawyer Veeru Mewa, representing relatives of some 165 Dutch victims, told AFP.

Sunday marked the deadline under the 1999 Montreal Convention that allows bereaved families to launch claims against airlines for up to two years.

James Healy-Pratt, whose London-based law firm represents around 30 families, told AFP 85% of the claims against Malaysia Airlines had been settled "on confidential terms."

Six claims remain before the Malaysian High Court in Kuala Lumpur, he said.

Lawsuits have also been filed against separatists and their backers.

Ukrainian President Petro Poroshenko on Sunday vowed that "the perpetrators of this tragedy must be punished."

Separatist authorities deny responsibility for the disaster, saying Ukrainian forces were to blame for the attack.

The European Union in early July formally extended damaging economic sanctions against Russia by 6 months due to lack of progress in resolving the conflict in eastern Ukraine. (afp/ez)