Sri Lanka fighting rages, aid workers cannot help

TRINCOMALEE, Sri Lanka, Aug 3 (Reuters) Artillery pounded Tamil Tiger positions in northeast Sri Lanka while rebels fought firefights with troops early today as the island slipped back towards civil war.

More than 800 people have died this year and ambushes, air strikes and naval clashes had become commonplace, but it was a dispute over a rebel-held water supply that led to the first major ground fighting since a 2002 ceasefire.

''Right now, it's very localised,'' said a diplomatic source.

''But I think it will spread because the Tigers need to make the government wonder where to put their troops next.'' Outgoing multi-barrel rocket fire and the distant flash of impacts in rebel areas lit up the night sky over the port of Trincomalee. The military said clashes continued in the nearby town of Mutur.

''There are firefights and mortar and artillery fire still going on,'' said a military spokesman. ''Some Tigers are still in the town and are firing at our troops with small arms. They are surrounded and trying to move east back to their own territory.'' Both sides say they want peace but diplomats fear the truce may become irrelevant and a two-decade civil war that has killed more than 65,000 people will resume.

MARCH HALTED The main military advance to reopen a single Tiger-held sluice gate south of Mutur and restore water to 50,000 people seems to have all but halted amid minefields and mortar fire.

The Liberation Tigers of Tamil Eelam (LTTE) yesterday attacked three army camps before dawn and the military fear for more attacks.

Assessing casualties is almost impossible. The army says it killed dozens of rebels yesterday for the loss of six servicemen.

Diplomats say the government is likely talking up rebel losses and may also talk down its own casualties.

Overall, diplomats say the government may have bitten off more than it can chew in launching an offensive and the Tigers, whose ultimate goal is a homeland for minority Tamils in the north and east, are doing better than expected.

On Tuesday, the rebels were able to shell the Trincomalee naval base with howitzers. The fire did not resume yesterday, indicating possibly that Tiger artillery had either been destroyed or moved out of range.

The big question mark, aid workers say, is over what is happening in the mainly Muslim, army-held town of Mutur, close to the border with rebel territory. The town overlooks the entrance to Trincomalee port.

Some aid workers say Mutur seems to have fallen, with civilians sheltering in churches, mosques and education centres. So far, it is too risky for aid staff to head in.

Mutur is bordered to the north by water and to the east and west by rebel territory. If, as some reports suggest, clashes block the road to the south, then the town is cut off.

''We have the same problem as everybody else -- we cannot reach them,'' said one aid worker.

Reuters DKA VP0923