The Il-76 transport aircraft came down overnight in a city mostly controlled by pro-Russian rebels
Ukraine's
President Petro Poroshenko has vowed to retaliate after pro-Russia
separatists shot down a military plane in the east, killing 49 people.
Those involved in such "cynical acts of terrorism" must be
punished, said Mr Poroshenko, who summoned security officials for an
emergency meeting.The defence ministry said the Ilyushin-76 transport plane came under anti-aircraft fire over the city of Luhansk.
It was about to land there, carrying troops and military equipment.
It is thought to be the biggest loss of life suffered by government forces in a single incident since the Ukrainian government in Kiev began an operation to try to defeat the insurgency in the east.
Defence ministry officials are investigating how the separatists brought down the plane, with reports suggesting the use of three "Stinger-like" missiles or a large-calibre machine-gun.
Everyone on board - nine flight crew and 40 troops - was killed.
In a statement released later on Saturday, Mr Poroshenko said: "Ukraine needs peace. However, the terrorists will receive an adequate response."
Footage posted on YouTube claims to show the burning wreckage of the Ukrainian military plane
"This is how we work," one of them, who identified himself as Pyotr, told Reuters news agency. "The fascists can bring as many reinforcements as they want but we will do this every time."
The eastern regions of Donetsk and Luhansk declared independence last month. In March Russia annexed the Crimean peninsula in the wake of the removal of Ukraine's pro-Moscow President Viktor Yanukovych.
But will it mean an added impetus to reach a ceasefire, or a further escalation of the fighting? And what of the arms used to bring down the large transport plane - were they Russian-supplied, as Ukrainian officials have insisted?
The chances for peace in Ukraine's east still exist. But with every major incident like this one, they seem to recede even further into the distance.
The airport has been under the control of government forces but the rebels hold most of the rest of the city.
Russian tanks Luhansk is the main city of one of two eastern regions where pro-Russia separatists have declared independence from Kiev.
The "anti-terrorist operation" by Ukrainian government forces has left at least 270 people dead over the past two months.
Mr Poroshenko had said that fighting must end "this week" following his inauguration last Sunday.
Meanwhile Nato has released satellite pictures which it says "raise significant questions'' about Russia's role in eastern Ukraine.
The alliance said the images showed Russian tanks recently arrived at a staging area near the border. Ukrainian officials have said the tanks later rolled into Ukraine.
The separatists have argued that tanks spotted in the region belong to the government. But Nato said they bore no army markings, "which is reminiscent of tactics used by Russian elements that were involved in destabilising Crimea".
The US on Friday said it was confident that tanks being used by separatists in eastern Ukraine came from Russia.
"No Ukrainian tank units have been operating in that area," a US state department spokeswoman said.
Russia has denied allegations that it is giving military support to the rebels.
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