Twenty LTTE boats, including five suicide craft, were sunk, and 80 Sea Tiger cadres killed, in a seven-hour battle off Point Pedro in Jaffna over Friday and Saturday, the Sri Lankan military said.
The LTTE, on its part, claimed that it had sunk two Dvora Fast Attack Craft of the Sri Lankan Navy, and damaged another.
The government military spokesman said that the battle began at about 8 pm on Friday, and lasted till 3.15 am on Saturday.
The Sri Lankan navy was supported by shore based batteries, he added.
The spokesman said that two Dvora Fast attack craft of the navy were slightly damaged and two sailors were wounded.
Relief supplies can't be moved by sea
The naval engagement in the Point Pedro-Kankesanthurai area means that the sea route for bringing essential supplies and relief for the people of the Jaffna peninsula from Colombo cannot be used.
A relief vessel with 3,800 tonnes of food and medicines on board was to leave Colombo for Point Pedro on Saturday.
The journey might have to be postponed indefinitely, observers said.
LTTE had objected to sea transport
The LTTE had already objected to transporting relief supplies by sea.
It had told the Sri Lankan government through the International Committee of the Red Cross (ICRC) on Wednesday, that it would not allow the sea route to be used for transporting supplies even if the ship was cleared and escorted by the ICRC or any other neutral agencies.
The LTTE said that it feared that relief carrying vessels could carry munitions for the Sri Lankan military garrisons in the Jaffna peninsula.
The militant group had no means to find out for itself if the vessels were carrying nothing but civilian relief supplies.
As an alternative, the LTTE offered to open the land route, the A9 highway linking Vavuniya with Jaffna through territory controlled by it in the Wanni.
The advantage in this for the LTTE is that it can look at the contents of the lorries at its checkpoints in Omanthai and Muhamalai.
Political observers say that by insisting on the land route, the LTTE can resume collecting taxes and other levies from those using the road.
After the closure of the A9, the LTTE has lost million of rupees in revenue.
The naval incident of Friday-Saturday might have been staged to prevent sea movement, military observers said.
Food shortage in Jaffna may worsen
Given the naval incidents off Point Pedro and the LTTE's refusal to let government relief ships use the sea route, the people of the Jaffna peninsula, numbering about 200,000, wonder if they would have to starve after a week or ten days.
"The stocks we now have can last only about a week or 10 days," KM Nathan, a resident said over the phone.
"We are in for a major crisis," he added.
The fighting in Jaffna, which began on August 11, had created 25,000 refugees. These depend on the state for their daily food.
Influx into India might increase
The population of Jaffna cannot run away from the peninsula, because the land route to the LTTE-held area of the Wanni is closed due to the military operations.
There are no air services, though the Palaly airport has been re-opened to civilian traffic. Private sector airlines, the only airlines to provide civilian air services to Jaffna, are too scared to fly.
Fleeing to India only option for many
The only alternative for the desperate Jaffna man may be to escape to India by boat.
And not surprisingly, about 11,000 of them have already landed in Tamil Nadu and are housed in refugee camps in Mandapam in south Tamil Nadu.
Though the camps in Tamil Nadu are filthy and over-crowded, the refugees see them as being better than war-affected North Sri Lanka, because what is at stake is life itself.