Malaysia Airlines plane flight MH17 was shot down over eastern Ukraine on Thursday.
"On behalf of the Indonesian government and me as a person, I express condolence to our country's friend Malaysia and families of the victims," the president told a press conference in his office televised nationwide.
An international investigation is necessary since there is an allegation that the plane was shot by a missile en route from Amsterdam to Kuala Lumpur, President Yudhoyono said.
"From reliable and official sources that Indonesia has been monitoring at, the Malaysian plane was downed by a land-to-air missile. Indonesia calls for an international investigation."
Should the plane be proved being shot down, the president said, it was a violation against international law.
"If that was what really happened, Indonesia expects the perpetrator would receive stern legal sanction," he said, saying Indonesia is willing to participate in the investigation efforts.
The president also ordered the nation's passenger planes to avoid flying in hostile air spaces above the conflicting areas in Ukraine and Gaza, Xinhua reported.
Meantime, the Philippine government on Friday confirmed that three Filipinos were among the people onboard the flight MH17.
The Department of Foreign Affairs spokesman Charles Jose said the Philippine government received this information from the Malaysian and Dutch authorities.
"Names of passengers have yet to be released," Jose said in a statement.
The Philippine embassies in Malaysia and the Netherlands are coordinating with the authorities and the Malaysian airlines on securing more information, Jose said.