Combating fake news and misinformation propagation is a challenging task in the post-truth era. News feed and search algorithms could potentially lead to unintentional large-scale propagation of false and fabricated information with users being exposed to algorithmically selected false content. Our research investigates the effects of an Explainable AI assistant embedded in news review platforms for combating the propagation of fake news. We design a news reviewing and sharing interface, create a dataset of news stories, and train four interpretable fake news detection algorithms to study the effects of algorithmic transparency on end-users. We present evaluation results and analysis from multiple controlled crowdsourced studies. For a deeper understanding of Explainable AI systems, we discuss interactions between user engagement, mental model, trust, and performance measures in the process of explaining. The study results indicate that explanations helped participants to build appropriate mental models of the intelligent assistants in different conditions and adjust their trust accordingly for model limitations.