Sri Lanka says 20 dead in rebel sea, land clash

COLOMBO, June 17 (Reuters) Sri Lanka's military said around 20 people were killed in a naval and land battle on the island's northwest coast today, while three suspected rebel divers were seized on a beach near the capital.

Sri Lankan government jets hit targets near the Liberation Tigers of Tamil Eelam (LTTE) stronghold Kilinochchi overnight in retaliation for an attack on a civilian bus earlier this week that killed 64, the worst incident since a 2002 truce halted two decades of war.

''Eleven LTTE boats were destroyed,'' a military spokesman said.

''We think about 15 LTTE cadres were shot an killed, four navy sailors were also killed and one civilian succumbed to his wounds.'' International truce monitors in the northwest Mannar district said they had heard heavy firing, much more serious than the hit-and-run attacks that have become commonplace in the last two months.

The Tigers said they had few details of what had happened, but each side blamed the other for hitting a church that was sheltering civilians. Some 50 civilians were wounded, the military spokesman said, saying rebels had thrown grenades into it as they withdrew.

But rebel media coordinator Daya Master said the military had shelled the church.

Contrary to expectations of some diplomats, government air strikes on Kilinochchi did not resume at dawn. But a military source said air support had been called in at Mannar and might be used to hunt down three surviving Sea Tiger craft which the navy could not follow as the water was too shallow.

The defence spokesman said three suspected rebels in diving gear had come ashore at town of Pamunugama along the shoreline some 18 kilometres north of Colombo near the resort town of Negombo and around 10 kilometres from the international airport.

All were arrested, but two took cyanide capsules and were taken to hospital, he said. Local people had reported an explosion at the scene but that could still not be confirmed, he added.

Almost 700 people have died so far this year, with violence soaring in early April but so far largely confined to the island's north and east, where the Tigers want to carve out a separate Tamil homeland.

Both sides have repeatedly said they want peace, but diplomats say neither has shown the flexibility needed to make concessions.

Earlier in the month, the Tigers walked out of talks in Norway without even meeting the government delegation.

The bus attack on Thursday provoked the government into launching its heaviest air raids on rebel territory since the cease-fire.

Analysts had worried that would provoke a heavy Tiger retaliation that could escalate to full-scale war.

REUTERS SRS BD1025