Sri Lanka continues offensive, rebels issue warning

COLOMBO, Aug 30 (Reuters) - Sri Lanka's military battled overnight to capture a rebel-held town at the mouth of a strategic northeastern harbour, officials said on Wednesday, as the Tamil Tigers warned the offensive could kill what is left of a paper truce.

Officials also said President Mahinda Rajapakse and Foreign Minister Mangala Samaraweera had flown to London overnight to meet British Prime Minister Tony Blair, likely on Thursday, but had no details.

The army said 13 soldiers have been killed in action and 79 wounded in fierce artillery and mortar fire since the new eastern offensive towards the northeastern town of Sampur began on Monday.

Both sides claim to have killed dozens of foes.

Sampur sits on the southern lip of Trincomalee harbour, 145 miles (230 km) northeast of the capital Colombo, and puts the Tigers in range of a naval base and maritime supply route to the island's besieged army-held Jaffna peninsula in the far north.

"The troops are moving towards Sampur. The main thing of this operation is to capture it to secure Trincomalee harbour and nearby civilian areas," said a military spokesman.

The army launched its heaviest artillery barrage for days towards rebel territory south of Jaffna early on Wednesday, but some schools in the town opened for the first time since the siege began two and a half weeks ago.

"I can hear the shells and I'm a little worried," said civil servant Suresh Kumar as he delivered his son to school. "If things are bad tomorrow I won't let him come. Their life is more important than these exams."

Violence also flared further south overnight when Tiger rebels attacked an army camp in the eastern district of Batticaloa with mortar fire, injuring three soldiers, while an abducted Tamil journalist feared murdered was released blindfolded in the capital.

DEADLOCK

The Tigers vow they will never relinquish Sampur.

"If the Sri Lankan military aggression continued, it would set a full stop to the February 2002 Ceasefire Agreement," pro-rebel website www.tamilnet.com quoted Tiger military spokesman Rasiah Ilanthiraiyan as saying.

Both the Tigers and the government say they stick by the terms of the truce, and each accuse the other of trying to force a return to a full-blown civil war that has killed more than 65,000 people since 1983.

But truce monitors say while the ceasefire still exists on paper, it is effectively dead on the ground as the worst fighting since stretches into a fifth week.

Hundreds of troops, rebels and civilians have been killed in the past month, and more than 200,000 civilians have been displaced from their homes and are now living in tent cities, churches and mosques.

"Our house was destroyed. We need security. We need a permanent home," said 27-year-old Shahu Hamid Mahira Jazeema, who lost one child to the Dec. 2004 tsunami and carried her 10-month-old infant through fierce fighting to reach a refugee camp in eastern Sri Lanka.

The government flatly rejects the Tigers' demands for a separate homeland for ethnic Tamils in the north and east -- where the rebels already run a de facto state -- and analysts say any return to meaningful peace talks is likely some way off. (With reporting by Ranga Sirilal and Peter Apps in COLOMBO) (Editing by David Fox;