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Sri Lanka's navy sank 11 Tamil Tiger vessels and killed dozens of rebels in a fierce five-hour battle overnight, the military said on Monday, a fortnight after the foes agreed to resume peace talks to halt renewed civil war.
The navy believes a top Tiger naval commander was killed or injured during the clash at sea around 80 km north of the strategic northeastern habour of Trincomalee -- one of the most serious naval battles since a 2002 ceasefire that now lies in tatters.
"There were 25 Sea Tiger boats sailing south. Eleven boats were sunk, and about 70 cadres were killed," said Chief Inspector of Police Percy Perera of the Centre for National Security. He said five navy sailors were hurt in the clash.
"Fourteen Tiger craft fled towards (their northeastern base at) Mullaithivu, five of those boats on tow," he added. "They were trying to bring in reinforcements and weapons."
The Liberation Tigers of Tamil Eelam were not immediately available for comment on the incident, which comes days after a suspected rebel front threatened to recapture recently lost territory on the southern lip of Trincomalee harbour.
However the Tigers have denied any involvement in the distribution of leaflets warning residents to leave immediately ahead of a rebel offensive.
Thousands of Muslims driven away by fighting in August have fled their homes for the second time in as many months in the wake of the threat, and aid workers say the military is preventing thousands more from leaving the area.
The government has ordered families who spent weeks in emergency shelters and schools in nearby towns to return to the Mutur area, and has closed down and cleared away refugee camps that local communities said were disrupting their lives.
With sporadic fighting and shelling continuing nearby, aid workers said the resettlement was done too soon.
"The haste in resettlement was obviously to show the world that the Sri Lankan government is in control of Mutur," the rebels said on their official website www.ltteps.org, accusing the military of printing the warning leaflets as a ruse.
The Tigers and the government have both told peace broker Norway they are prepared to meet for talks after a five-month deadlock to end a new chapter of civil war that has killed hundreds of civilians, troops and rebels since late July.
However, analysts and diplomats are sceptical the talks will actually happen, and fear a war that has killed more than 65,000 people since 1983 will grind on unless the two sides address the core issues: Human rights abuses by both sides and the rebels' central demand for a separate homeland for minority Tamils in the north and east.