Sri Lanka mine ambushes kill three, more attacks seen

COLOMBO, July 12 (Reuters) Suspected Tamil Tiger rebels killed two Sri Lankan policemen and a soldier in mine ambushes today, officials said, while diplomats feared that a recent lull in violence could be followed by a dramatic new attack.

More than 700 people have died so far this year, over half of them civilians and almost all since early April. But in the first 10 days of July, truce monitors say they know of only 19 confirmed deaths -- still too many, but a definite fall.

But the military said one soldier died in a claymore fragmentation mine ambush on the northern Jaffna peninsula today.

Later in the day, they said another mine ripped through a police pick-up truck, killing two policemen and wounding two more.

Both sides say they want peace and some hope they might have decided they cannot afford an all-out war that would hurt both the poor, Tamil-dominated north and the richer majority-Sinhalese south.

But others fear much worse is to come.

There are still few signs of life in the island's peace process.

The government may be working on constitutional reform to give more power to minority Tamils but the Liberation Tigers of Tamil Eelam (LTTE), who want a separate Tamil homeland, steadfastly refuse to return to talks.

''I don't know why it is quiet,'' said one western diplomat.

''But I don't particularly like it. The LTTE have a habit of attacking when you least expect it. I still think both sides are going for an escalation.'' Some fear Tamil Tiger rebels may simply be biding their time before a new attack, perhaps in the capital or maybe in the east, where both the Tigers and a group of rival ex-rebels -- who the LTTE say are army-backed -- are both said to be building up.

Two suicide attacks in Colombo this year that killed one top general and wounded the army chief have proved the rebels' ability to strike at the country's capital and economic heartland, analysts say.

Opinions are divided on whether war has already resumed. Truce monitors describe recent ambushes, attacks, killings, naval battles and air strikes as ''low intensity war'' but say the ceasefire still holds in most places most of the time.

Worried by reports of killings by members of the armed forces, the international community -- particularly India -- is putting the government under increasing pressure to halt the conflict. Some tourists are staying away and foreign investors are getting nervous.

''It is almost as if they have become more restrained,'' said Janes' Defence Weekly analyst Iqbal Athas, referring to the government. ''But the LTTE have clearly not given up violence.

There is a lot of diplomatic work going on behind the scenes.'' REUTERS SHB BD1602