The clashes saw advancing Lankan troops checked by waves suicide attacks launched by the rebels, the military said.
The United Nations that has described the situation as 'absolutely awful' has called for a halt in the fighting. US Secretary of State Hillary Clinton and her British counterpart David Miliband also appealed for the same in order to allow the civilians trapped in the war zone to escape.
But the Sri Lankan government has decided to rage the war stating that the Liberation Tigers of Tamil Eelam (LTTE) is now cornered in just four sq kms of the coastal jungle.
Reports suggest that at least 10 guerrillas have died in suicide attacks, and government estimates up to 20,000 civilians trapped in the embattled zone.
The Sri Lankan government has also denied the Rebel's reports accusing the government of shelling a make shift hospital that was attending to the wounded killing 47.