Sri Lanka closes schools after blast

COLOMBO - School holidays began early in Sri Lanka on Tuesday as a security precaution, a day after the first attack on a diplomat since a civil war began in 1983.

A suspected Tamil Tiger front also threatened to attack civilians, adding to the sense of alarm.

Fighting raged in the far north as troops and rebels exchanged artillery fire, the military said, as fears grew the fighting, the worst since a 2002 ceasefire, would escalate.

"Earlier we didn't have threats like this. I don't think they'd target us, but the safety of the children has to come first," said Sylvester Ranasinghe, Rector of St. Joseph's College in Colombo.

The government said a claymore mine attack on a Pakistan High Commission convoy that killed 7 people and injured 17 on Monday was a rebel suicide attack. But witnesses said they saw no evidence of the remains of a suicide bomber at the site.

Pakistan is one of Sri Lanka's biggest arms suppliers.

The attack on the convoy came after air force jets bombed Tiger territory in the north. The rebels said the raid killed 61 schoolgirls.

Nordic truce monitors said they only saw the bodies of 19 young men and women aged around 17-20 and, while it did not appear to be a rebel camp, they had not ruled out the possibility they were receiving civilian defence training.

UNICEF said they did not have access to the dead.

The government on Tuesday showed journalists what appeared to be satellite footage of what it said were Tigers fleeing a training camp shortly after Kfir jets bombed it on Monday. A senior official said the age of combatants was of no concern.

"Even it is a 17-year-old child in terms of age, they are soldiers who are prepared to kill whoever comes in front of them. Therefore the age or the gender is not what is important," defence spokesman Keheliya Rambukwella said.

Thousands of residents were still holed up in churches and homes as troops tried to flush out rebels who have landed on an islet to the west of northern Jaffna town. Residents stockpiled food after an indefinite curfew was briefly lifted. Most phone lines were down.

Chilling threat

"Life is difficult, but at least we have shelter," said 40-year-old plumber Patrick Selvam, who was sheltering with his wife and three children at a Catholic school in Jaffna. However, he sneaks home each night to guard their belongings.

"I am worried about robberies," he said.

Aid workers estimate around 100,000 people are newly displaced in Sri Lanka's north and east after the worst fighting since a 2002 truce first erupted in the east three weeks ago.

On Tuesday, the murdered deputy head of the government peace secretariat, Kethesh Loganathan, an ethnic Tamil shot dead by suspected rebel gunmen, was cremated in Colombo.

Residents fear more attacks after his assassination and two blasts in the past week and the chilling threat from a suspected Tiger front to bomb civilians in the majority Sinhalese south.

The Colombo stock market fell 2.4 per cent on Monday as investors worried attacks could hurt industries, such as tourism, and dent growth prospects for the $23 billion economy. The market recovered a little on Tuesday, ending up 0.76 per cent.

South Africa's visiting cricket team, which had been on the verge of pulling out of a triangular series with Sri Lanka and India, said it would continue after local authorities vowed their security would be better than a government minister's.

Many foreign and local companies have put investment plans on hold until it becomes clear whether the island is sliding back into a full-scale war that has already killed around 65,000 people since 1983 and displaced hundreds of thousands.

"There are very real risks in Colombo and clients need to be aware of them," said Maria Kuusisto, South Asia Analyst for Control Risks Group. "The situation is escalating rapidly in the north and east and, therefore, our clients need to be flexible."

UN Secretary-General Kofi Annan was "profoundly concerned" and urged the government and rebels to return to the negotiating table, allow aid agencies free access and let civilians leave contested areas, a spokesman said overnight.

- REUTERS