Sri Lanka rebels break through military defences

JAFFNA, Sri Lanka, Aug 12 (Reuters) Sri Lanka's Tamil Tiger rebels broke through military defences in the island's far north and overran army bunkers on Saturday, truce monitors said, as the fiercest fighting since a 2002 truce spread.

The Tigers and army exchanged intense artillery fire and government jets bombed near the rebels' forward defence lines in the northern Jaffna peninsula, residents said, as thousands of civilians fled to churches.

The military said it sank five Sea Tiger boats as the rebels' feared sea arm attacked army posts on the shore in Jaffna, but analysts said they suspected the Tigers were trying to divert pressure from their fighters battling in the east rather than trying to capture Jaffna.

''Ten bunkers of the Sri Lankan Army were taken but five of them were retaken by the security forces,'' said Robban Nilsson of the unarmed Nordic truce monitoring mission. ''They are still 500 metres inside the (army) forward defence lines.'' ''It's an extremely serious situation,'' he added, saying Tiger fighters had landed on an island west of Jaffna and had engaged the navy.

The military said it still controlled the whole peninsula and had killed 100 Liberation Tigers of Tamil Eelam (LTTE) rebels, but said a few might have got through. Around 40,000 troops are stationed in Jaffna, which is cut off from the rest of the island by rebel territory.

As civilians from coastal villages sought refuge, expatriates headed to a UN compound after being warned to leave immediately.

ARTILLERY FIRE In the east of the island, the Tigers rained artillery on the strategic port of Trincomalee, a vital maritime army supply line to Jaffna, before dawn. The military said there was some damage, but gave no details.

A Reuters witness in Jaffna, where the army has declared an indefinite curfew to keep people in their homes, heard a fierce exchange of artillery fire to the east. Electricity was cut off for hours.

Sri Lanka's Tamils consider Jaffna their cultural homeland, and analysts say the Tigers are intent on recapturing it.

Some distraught residents dread being displaced yet again.

''We cannot go on like this forever,'' said Richard, a retired Tamil merchant seaman, who declined to give his family name. ''I incurred heavy financial losses when I was displaced in 1995, and it took me some time to rebuild my house.'' ''It is better to hand over Jaffna to the LTTE. Only then will this stop. Until then, this war will go on.'' FIGHT OVER WATER The military accused the Tigers of provoking the northern confrontation and the government has said it will not halt operations until it controls a disputed waterway in the east and an irrigation reservoir that feeds it. This was the issue which sparked the fighting 18 days ago.

The Tigers insist the land is theirs and say continued army attacks are effectively a declaration of war. Monitors said nearly 300 majority Sinhalese civilians in government areas had been given assault rifles near the sluice area.

''The problem is the government basically started this. I think we are inclined to sit back and let them take it on the chin for a while,'' said one diplomat from a G7 country.

North of the town of Batticaloa towards a sluice gate on the waterway, the Red Cross say thousands of Tamils are displaced behind rebel lines having spent days under shellfire.

Around 50,000 people are in camps in government territory.

The Tigers have long demanded a separate homeland for ethnic Tamils in the north and east of Sri Lanka but President Mahinda Rajapakse has ruled this out. The rebels say any return to stalled peace talks is a distant prospect.

Reuters BDP GC1312