Sri Lanka's navy sank two large ships on Sunday it said were transporting arms for Tamil Tiger rebels and the blazing vessels and the crew disappeared under the waves after a series of explosions.
The incident, off the restive eastern coast, came after a series of land and sea clashes over the past year and a military offensive to wipe out the Liberation Tigers of Tamil Eelam rebels from east.
"The Navy detected a suspicious 70 to 75 metre vessel about 195 nautical miles (400 kms) around 2.30 am (2100 GMT) off Arugambey and the details given by the ship were false. We fired warning shots and they fired at us," said Navy spokesman Commander D.K.P. Dassanayake.
Another ship was spotted five hours later in the same area, and when challenged it opened fire, he said. Both the rebel ships, which were carrying explosives and mortar bombs, were destroyed.
More than 40,000 people have fled rebel-held territory in the eastern district of Batticaloa over the past weeks as the military seeks to drive Tamil Tiger rebels from the area.
The rebels accuse the military of mounting offensives to capture territory that belongs to them under the terms of a tattered 2002 truce, and have warned of a bloodbath throughout the island. The army argues it is liberating civilians, accusing the Tigers of using them as human shields. Both sides have repeatedly ignored calls from the international community to halt a war that has killed around 68,000 people since 1983, and around 4,000 of those in the past 15 months.