UPDATED 7.32am: Russia has vetoed the setting up of an international criminal tribunal to investigate the downing of Malaysia Airlines flight 17 over Ukraine.

The vote at the UN Security Council has failed.

Malaysia said the Council has taken a step back, but will not be deterred by today's unfortunate events in the pursuit of justice.

Transport Minister Liow Tiong Lai confirms Malaysia will consider all other options. He reports they owe it to the families of the loved ones to soldier on in the quest for accountability.

"Rest assured that we will not stop here and we will never give up. We have to do something. Doing nothing is not an option."

MH17 tribunal: NZ faces first UN Security Council hurdle

Under New Zealand's UN Security Council chairmanship, Australia tried to get an international criminal tribunal set up to investigate the downing of flight MH17.

MORE: Listen - Robert Patman on the MH17 UN Security Council vote

Australia sponsored the resolution in a bid to bring justice to the families of the 298 victims. 38 Australians were killed in the disaster.

Foreign Minister Julie Bishop asked Russian President Vladimir Putin not to use his veto.

"We will be bitterly disappointed if Russia were to use the veto. I don't believe that justice should be denied to the families by the use of a veto," Bishop said.

"We believe that a tribunal with the backing of the UN security council is mot likely to be able to deliver justice and we don't want it politicised."

Former ambassador to the UN, Terence O'Brien, reports New Zealand will be in direct discussions with the Russians.

"It's up to the chairman how he or she conducts the actual thing, but one part of it will be just to meet them all one on one, call them into a meeting - each ambassador - and test them to see what their bottom line is."

Dutch Prime Minister Mark Rutte made an urgent appeal to Russian President Vladimir Putin.

He telephoned Putin ahead of the vote in New York this morning to seek his backing for setting up an international tribunal to try the as-yet unidentified suspects.

Malaysia, the Netherlands, Australia, Ukraine and Belgium have called for such a tribunal with a vote set for around 7am.