INSURGENCY-SRILANKA-ATTACK

TRINCOMALEE, Aug 4: Thousands of civilians fled Sri Lanka's eastern battle zone on foot today as shells fell nearby, the Red Cross said.

The rebels and army dueled with artillery and mortar fire, and small pockets of rebels continued firefights with troops in the eastern Muslim town of Mutur, where aid workers say around 22,000 people have been trapped by the fighting.

Tamil Tigers attacked also army camps and Norway's peace envoy flew in to try to halt a slide back to civil war.

''We just got information that they started moving. According to information in Mutur, everyone will leave -- that's 6,000-7,000 families,'' said Yvonne Dunton, head of the Trincomalee office of the International Committee of the Red Cross.

''The problem is they are being shelled with either mortars or artillery,'' she added. ''We will send trucks and buses to pick them up along the road.'' At least 20 civilians, 12 Tigers and one soldier were killed on Thursday. The military says it has killed more than 70 rebels in the past week and the Tigers say they have the bodies of 40 troops ready to hand over. But each side dismisses the other's claims.

''(The Tigers) are attacking our camps in the east. There is artillery and mortar fire,'' said military spokesman Major Upali Rajapakse. ''There are some civilians being injured.'' ''There are some Tigers in Mutur town. They are trying to move west into certain areas they control.'' There were other isolated attacks in the north-central district of Vavuniya and in the eastern district of Batticaloa, where a breakaway rebel faction attacked a camp of the mainstream Tigers, killing five fighters.

Thousands flee on foot as Sri Lanka fighting rages WAR BACK ON? The fighting is the most intense and prolonged since a 2002 truce and diplomats and some military personnel say the civil war that began in 1983 appears to have resumed in all but name.

Well over 800 people have been killed so far this year in escalating attacks and military clashes between the army and the Tigers, who are furious at President Mahinda Rajapakse's outright rejection of their demand for a separate homeland for ethnic Tamils in the north and east.

Dozens of badly wounded people, including several children, were ferried across Trincomalee harbour in gunboats to the town of the same name yesterday, where the hospital is overflowing with casualties.

Analysts say the island's protracted peace process is coming apart at the seams.

Norwegian special peace envoy Jon Hanssen-Bauer flew to the island on Friday to discuss how to preserve a Nordic truce monitoring mission after Denmark, Finland and Sweden pulled their staff out in the face of a rebel ultimatum.

The Tigers gave monitors from European Union nations a Sept. 1 deadline to quit the island after the bloc listed them as a terrorist organisation alongside the likes of al Qaeda, reducing the 54-member mission to just 20 people.

REUTERS