Sri Lanka rebels threaten monitors after naval clash

COLOMBO, May 12 (Reuters) Sri Lanka's Tamil Tigers have told Nordic truce monitors they travel aboard Sri Lankan Navy ships at their peril after the worst military confrontation since a 2002 truce.

A flotilla of rebel boats yesterday attacked a transport ship carrying hundreds of servicemen and sank a navy fast-attack boat.

The military said 17 sailors and 50 Tigers died in the attack that prompted air strikes on rebel territory.

The transporter was carrying a truce monitor and flying the monitors' flag when the military says suicide rebels attacked them.

The Tigers say their fighters were conducting a naval exercise when they were fired upon by the navy.

The monitors accused the Tigers of a gross violation of the ceasefire and said they had no rights at sea, which is considered under government control.

''SLMM monitors are used by the Sri Lankan Navy as human shields,'' the rebels said in a letter to the SLMM posted on their official Web site www.ltteps.org overnight, referring to the Sri Lanka Monitoring Mission.

''We urge you for the last time not to be on board Sri Lankan Naval vessels until further notice from us. If you choose to ignore our warning and request, we are not responsible for the consequences,'' it added. ''Please take this as the last warning to you.'' Bombings and land and sea clashes have killed about 270 people in the past month. The island was quiet early on Friday as both sides assessed the damage after daybreak.

The government said the bombing raids by fighter jets and helicopter gunships near the Tigers' northern stronghold were a ''limited response'' to the naval battle, and would not be repeated on Friday unless the armed forces were again attacked.

The Tigers, who are fighting for a separate homeland for ethnic Tamils in the north and east, have withdrawn from peace talks indefinitely, and warned ominously on Tuesday that Sri Lanka was moving towards the ''fringes'' of war.

The clash came after a rash of attacks in April, one of the bloodiest months since the ceasefire halted a war that killed over 64,000 people, and after a Japanese peace envoy had made an abortive bid to coax the Tigers to return to peace talks.

However, while both sides insist the truce technically still holds, recent sporadic violence looks a lot like periods of the war and diplomats and analysts expect to see continued low-intensity conflict.

''If either side had wanted to go for a full-on war, they have had ample opportunity and excuses to do so by now,'' said one diplomat, asking not to be named. ''I expect to see more of the same. The danger is that things could spiral out of control.'' Reuters SI GC0919