The downing of Malaysian Airlines Flight 17 is the most dramatic moment in the Ukraine-Russia conflict. As well as a terrible tragedy – current figures put the death toll at 298 – it radically raises the stakes by fully internationalising the conflict. The fact that Dutch, Australian, Malaysian, British and German citizens were among the innocent victims will severely ratchet up pressure for Russia to end its meddling in Eastern Ukraine.

Early evidence points to Ukrainian separatists as the culprits. A Ukrainian signals intercept seems to show a call by pro-Russian separatists to Russian military intelligence taking responsibility for the shoot-down. The breakaway Donetsk People's Republic (DPR) has moved quickly to delete a Tweet boasting it had captured an SA-11/17 'Buk' missile system from Ukrainian forces on 29 June. And reports have emerged that the DPR has been hindering the search, perhaps even by removing flight data recorders.

Other theories are possible, although less likely. The missile could have been fired from Russia, under direct orders from military commanders on the border with Ukraine. Conversely, Ukrainian forces could have mistaken the airliner for either a Russian spy plane or an incoming airborne assault.

But regardless of who is responsible, international attention is now firmly refocused on the conflict, which has been following a pattern of rapid escalation and de-escalation.

A ceasefire was declared and then swiftly collapsed. Putin called for OSCE involvement, including monitors. He pulled his troops back from the border, and then put them back. More recently, air-to-air missiles fired from the Russian side of the border shot down a Ukrainian SU-25 fighter. Russian separatists called for dialogue and then shot down a military transport. The government in Kiev spoke of the need for reconciliation before launching what it thought would be a swift anti-terrorist campaign.

So will the downing of MH17 serve to escalate or de-escalate the crisis? It is worth recalling that one of the tensest moments in the Cold War came in 1983, when a Soviet Su-15 interceptor shot down Korean Airlines flight 007 west of Sakhalin Island.

One possibility is that the weight of international pressure on Putin will be so great that he will have to abandon his support of the separatists and end his strategy of 'maskirovka' (military deception). US officials are already calling for a radical re-evaluation of the Washington-Moscow relationship. John McCain, whose views on foreign policy are still respected, has raised the prospect of arming Ukraine and instituting broad-based sanctions against the Russian regime. Previously, Western sanctions have been minimal, taking care not to target businesses of major strategic importance like Gazprom. Such an approach may no longer be feasible.

A second possibility is that the conflict will simmer on, with the question of who was to blame becoming a central plank of the propaganda war. Russian media will blame Kiev and Western interference. The US will blame Putin and use the tragedy as an opportunity to strengthen anti-Kremlin forces in Russia. The EU – and especially Germany – will face another litmus tests of its 'soft power' agenda, caught between public opinion nudging it towards more support for Ukraine and having its energy supplies threatened if it does so. It is noteworthy that Ukraine's President Petro Poroshenko has stopped short of blaming Moscow, instead calling the tragedy an act of terrorism.

A final possibility is that the downing of MH17 will escalate the crisis, prompting Russia to invade the separatist regions. Under that scenario, Putin will feel that events, whether by accident or design, have forced his hand. The Kremlin has made the reintegration of industrialised Eastern Ukraine a cornerstone of its proposals for a Eurasian Union. To back down could spark a domino effect amongst Russia's allies, resulting in a rapid contraction in its sphere of influence, and the prospect of new and nascent secessionist movements gaining strength in Russia itself.

The outcome is likely to combine elements of all these. It is hard to see Putin backing down completely, given that he has staked his leadership on success in the 'Near Abroad'. Likewise, it is unlikely that leading EU nations will risk a gas war with Russia, although it will strengthen internal calls for energy diversification. Last, NATO will not go to war with Russia over Ukraine. This means Kiev will likely lose if Russia invades, leaving it as little more than a pro-Western rump state.

It is deeply unpalatable that such a terrible event will inevitably be politicised. But much of the solution to the Ukraine-Russia conflict depends on allowing each side to save face. This is something all the players have been trying to do, at least tacitly, since the conflict began.

Whether the loss of life on MH17 provides that chance is an open question. It can sometimes take a horrendous act to force protagonists to blink, exiting a conflict with some honour intact. Yet once culpability is firmly established, saving face may no longer be an option. Under those conditions the temptation for leaders to escalate, rather than de-escalate, becomes a dangerous possibility.