Sri Lanka launches second day of strikes on Tigers

KILINOCHCHI, Sri Lanka, June 16 (Reuters) Sri Lanka's air force dropped bombs near the Tamil Tiger rebel headquarters in Kilinochchi today, opening a second day of strikes in retaliation for an attack on a civilian bus that killed 64.

The town was overflown once by a propeller-driven spotter plane just after dawn before jets flew in and dropped at least five bombs.

Aid workers scurried into bunkers to take shelter.

The spotter plane returned after the bombs fell.

''We are still assessing the situation and our response,'' head of the rebel peace secretariat, S Puleedevan, told Reuters by telephone. ''It looks as though the government is ready for war.'' More than 500 people have died since early April as a 2002 ceasefire fades into low intensity conflict.

Residents kept off Kilinochchi's streets, but loudspeakers asked civilians to report for military training and continued to advertise a bicycle race later in the day.

The Liberation Tigers of Tamil Eelam (LTTE) denied responsibility for a claymore mine ambush yesterday that blasted a bus on a remote road near rebel territory, killing 64 civilians, the worst incident since a 2002 ceasefire.

The Nordic-staffed Sri Lanka Monitoring Mission (SLMM), increasingly caught in the middle of the the conflict, condemned the attack but said they also regreted the government retaliation.

''SLMM still hopes that the parties of the ceasefire agreement will respect the agreement and get back to the negotiating table,'' said SLMM spokesman Thorfinnur Omarsson.

SHELLING, BOMBING Diplomats and analysts said the bus attack had all the hallmarks of the Tigers. Few have believed their recent denials of responsibility for similar attacks on the military.

In retaliation, the military bombed rebel positions along the eastern coast and also around Kilinochchi, aiming for a rebel airfield that was also targeted in a smaller retaliatory raid in May.

Tiger officials said rebel territory near the government-held northeastern port of Trincomalee was also being shelled. A military spokesman said he could not comment on current operations.

Pro-rebel website Tamilnet said one of the Thursday raids on the northeast coast missed its target and hit a camp containing displaced people from the 2004 tsunami. The website did not say if there were any casualties.

Diplomats fear Sri Lanka's peace process is terminally stalled.

The Tigers, who want a separate state for minority Tamils in the island's north and east, last week refused to meet a government delegation for talks in Norway.

Diplomats say neither the government nor rebels have shown enough flexibility, but some warn the situation is now spiralling out of control and that it may soon be too late to stop a return to a two decade war that has killed more than 64,000 people.

REUTERS SHR VC1028