COLOMBO, Apr 30 (Reuters) Sri Lanka's government and the Tamil Tiger rebels say they both want peace talks, and diplomats hope they are gradually moving back from the brink of war, but in the island's seafront capital there are more jitters than relief.
A suicide blast inside army headquarters in Colombo last week killed at least 11 people and gave residents a rude reminder of what life was like before the government and the Liberation Tigers of Tamil Eelam (LTTE) signed a truce in 2002.
''It's started again,'' said Anusha Perera, working at a lingerie store in a Colombo shopping mall. ''It's very sad.'' Two days before, troops had raided the mall, a collection of bustling DVD shops, arcades and food outlets, training weapons on a Tamil woman, searching her bag and dragging her away to a van.
The atmosphere since the suicide bombing -- which the military followed up with air and artillery strikes on rebel territory in the north -- has not only given Perera a bad case of nerves, it's been bad for business.
''Today is better but the last few days were very bad.
People are afraid to come out,'' she said.
Roadblocks, which formed a maze through the city during the two-decade war over the Tigers' fight for a Tamil homeland in the north and east, are back, surrounding not only the president's residence and military headquarters but popping up all over.
''They are not static checkpoints but moving checkpoints. We change them strategically,'' said police spokesman Rienzie Perera.
Police have also stepped up intelligence gathering around the capital, he said, amid fears that the low-intensity conflict plaguing the north and east for weeks would erupt into Colombo if full-scale hostilities resume.
''The LTTE has infiltrated the city of Colombo. It has cells there and if we need proof we only need to look at the attack at army headquarters,'' said Jane's Defence Weekly analyst Iqbal Athas.
Businesses have been moving out of the city's highest tower blocks, fearing they might be potential targets.
Residents were worried about the impact on the 20 billion dollars economy.
''If the war starts again the price of every commodity will go up and what will happen to poor people like us,'' said S. Siriya, 39, a street vendor.
But a bigger concern was the threat of renewed bomb blasts in a city that has come back to life since the ceasefire, with new shops and restaurants and with beachfront parks once more crowded with families.
''It's frightening,'' said Shevi, a 30-year-old consultant who gave only her first name. ''You don't know what will happen or at what time.'' REUTERS SI VC1236