And Douglas Alexander, the Shadow Foreign Secretary, said world governing football body Fifa should be putting in place contingency plans to relocate the tournament.
The Paisley MP said: "If it is confirmed that Russia carries direct responsibly for downing of flight MH17 and the Kremlin nonetheless continues to sponsor and fuel the conflict in Ukraine, then Fifa will surely face calls to reconsider if Russia should host the competition."
As the remains of those killed continue to arrive in the Netherlands and Dutch investigators try to gain access to the crash site, calls are growing for tougher sanctions on Moscow.
Mr Clegg suggested that it was "unthinkable" at present that the tournament could go ahead in the country blamed by the West for supplying arms to the separatist rebels accused of causing the deaths of all 298 on board the plane.
Last week, Fifa ruled out calls from German politicians for Russia to be boycotted.
The EU has added another 15 individuals and 18 entities to the list of those subject to asset freezes and ambassadors in Brussels are considering as early as this week to extend the punitive actions to state-owned banks' access to capital markets and to the arms and energy sectors.
Yet Mr Clegg made clear sporting events should also be part of the package of measures, including the cancellation of Russia's first Formula 1 Grand Prix, which is due to take place in October.
"Vladimir Putin himself has to understand that he can't have his cake and eat it," declared the Liberal Democrat leader.
"He can't constantly push the patience of the international community beyond breaking point, de-stabilise a neighbouring country, protect these armed separatists in the east of Ukraine and still have the privilege and honour of receiving all the accolades in 2018 for being the host nation of the World Cup."
The 2018 World Cup qualifying draw is next summer.