Sri Lanka bombed Tamil Tiger territory near their northern headquarters on Thursday after rebels attacked a naval transporter with hundreds of servicemen aboard and sank another naval vessel, killing 17.
The air force scrambled fighter jets and helicopter gunships to the area in the worst military confrontation since a 2002 cease-fire halted two decades of civil war. Neighbouring India's military was assessing the situation.
The 17 crewmen were killed when Tiger suicide bombers rammed into their fast attack boat off Sri Lanka's northern tip, while the military sank 5 rebel vessels. The transporter carrying 710 troops had sought refuge in Indian waters and was safe.
"The air force has bombed our territory, but nothing has fallen here," rebel media co-ordinator Daya Master told Reuters from Kilinochchi town, capital of the Tigers' de facto state. He had no word on rebel casualties, but the military believed 50 Tigers died at sea.
Bombings and land and sea clashes have killed more than 200 people in the past month. More people were killed in April than during many periods of the war itself, when attacks were often sporadic and followed by weeks of little activity.
Local aid workers in Kilinochchi said they had heard loud explosions nearby. Daya Master denied reports that a strategic air strip in rebel territory had been bombed, which military officials believed had been hit.
The naval battle was around 30 miles (50 km) away from the Liberation Tigers of Tamil Eelam's northern stronghold. In Vavuniya, near the Tigers' southern border, the streets were deserted as nervous residents stayed inside.