Sri Lanka Tigers blame govt for bloody violence

COLOMBO, Apr 13 (Reuters) Sri Lanka's Tamil Tiger rebels accused the army today of helping rioters attack ethnic Tamil shops in the island's northeast after a suspected rebel bomb, as analysts warned the island was on the brink of a war.

The army said they believed 16 people died yesterday in suspected rebel blasts and in mob violence that followed on one of the bloodiest days since the island's strained 2002 ceasefire.

The military denied assisting the crowd, a charge made on the rebel peace secretariat website. ''Rioters with the assistance of the Sri Lankan Army and... Navy began burning shops owned by Tamils,'' the website said.

The two sides are still due to meet next week in Switzerland for a second round of talks but diplomats are increasingly doubtful they will take place. Around 40 people have died in the last week and most expect further violence to follow.

Diplomats and analysts say the Liberation Tigers of Tamil Eelam (LTTE), whose two decade fight for an ethnic Tamil homeland in the island's north and east has killed more than 64,000 on both sides, may use the riots to pull out of the meeting.

''One thing that is certain is that the talks are out,'' said Janes Defence Weekly analyst Iqbal Athas. ''The events of the past few days show the LTTE trying to provoke the military into a retaliatory strike and when that happens, that is when the war will resume.'' The military said there had been sporadic incidents overnight, with an army major and a soldier shot by a suspected rebel on Wednesday evening and a shooting and grenade attack in the northeast overnight that hurt no-one.

The head of a Nordic staffed mission monitoring the ceasefire was due to meet the head of the rebel political wing later in the day. The rebels are angry the government has not disarmed other Tamil groups they say are attacking them, but have denied the recent attacks. Few in Sri Lanka believe them.

CROWDED MARKET BOMB The event that sparked riots and chaos in the multi-ethnic northeastern port of Trincomalee yesterday was a suspected Tiger bomb in a crowded market packed with mainly members of the island's Sinhalese majority.

By the end of the day, the army says it believes 14 people had been killed in the town -- which contains large populations from both the island's Sinhalese majority and Tamil and Muslim minorities. But how they died was not clear.

But today morning the army said that the bomb killed one soldier and ten civilians, and that two civilians died in the unrest.

''They are attacking innocent civilians,'' said army spokesman Brigadier Prasad Samarasinghe. ''There are Tamils, Muslims and Sinhalese among the dead. Police couldn't control the situation. But now Trincomalee is under control.'' A Reuters photographer said a curfew remained in force in the town, which is partly surrounded by rebel territory. He counted 15 dead bodies including one child in the hospital, many burnt, but it was unclear how they died.

Janes' analyst Athas said the military might be trying to deliberately lower the number of dead from the riot.

''These guys have a reputation for reprisals,'' he said of the rebels, saying attacks on Sinhalese villages near rebel territory were possible over the long Sinhala and Tamil new year weekend.

Analysts say many foreign investors were waiting outcome of next week's before deciding whether to put money into the 20 billion dollar economy, and any new violence is seen also impacting both the key tourist sector as well as rebuilding after the 2004 tsunami.

REUTERS SY BS0959