The blunting of the Sri Lankan Armed Forces' offensive in the Muhamalai sector on Wednesday is seen here as an equaliser scored by the LTTE in the war game being played in North East Sri Lanka since April 25.
By stopping the Sri Lankan army's ambitious bid to take Elephant Pass and then Pooneryn, and inflicting heavy casualties in the process, the LTTE has avenged the defeats it suffered in the Muhamalai-Kayts sector in Jaffna, and in Maavil Aaru, Mutur East and Sampur in Trincomalee district in the East.
Political observers say that the reverse suffered by the government forces on Wednesday, might make the atmosphere conducive for the resumption of peace talks, scheduled to be held in Switzerland on October 28 and 29.
Both sides claim to have inflicted very heavy casualties on the opponent.
The pro-LTTE Tamil website www.puthinam.com said that over 200 Sri Lankan troops were killed and 400 seriously injured. Other estimates are 120 killed and over 400 injured.
The LTTE's military spokesman, Rasaiah Ilanthirayan, told the BBC that the LTTE had recovered 75 bodies of Sri Lankan soldiers from Kilaly south of Muhamalai.
A spokesman of the Nordic truce monitors told Hindustan Times that the LTTE had told the Red Cross that it was ready to hand over the 75 bodies on Thursday.
But the government's National Security Media Centre said that the retreating LTTE had left "hundreds" of bodies behind.
The government troops themselves lost only 43 men, it said. 224 were wounded.
Military experts say that the Sri Lankan Army had advanced several hundred metres from Muhamalai, Kilaly and Nagarovil.
But were beaten back by fierce LTTE resistance.
Apparently, the troops found the LTTE well entrenched and ready to meet the advancing troops, though they were advancing on three fronts.
This time round, air force support was not of much help.
The troops had to retreat to their original positions, the experts said.
Earlier too, the offensive by the Sri Lankan forces in the eastern sector of Vaharai had met the same fate.
They had walked into well-entrenched LTTE positions.
Also, the regular Sri Lankan troops could not link up with the Karuna group (a splinter group of the LTTE), which proved to be disastrous for both.
Earlier, the LTTE too had walked into well-entrenched Sri Lankan positions and paid for it dearly.
On August 11, the LTTE had attacked well-entrenched Sri Lankan troops in the Muhamalai-Kayts sector and was routed.
Over-confidence and under estimation of the enemy could be one reason for the reverses suffered by the two sides.
At first it was the LTTE, which under-estimated the will power and fighting capabilities of the government forces.
It did not expect the government to use the Air Force in the way it did, and that too on a daily basis. The LTTE acutely felt the absence of anti-aircraft missiles.
The LTTE had captured areas, which it could not hold. Its defences in Maavil Aru, Mutur and Sampur lacked depth.
Mutur and Sampur were exposed to the sea, which was dominated by the Sri Lankan Navy based in nearby Trincomalee.
In the case of Wednesday's offensive, the LTTE's defences had depth. It extended up to Elephant Pass and Kilinochchi.
It had its artillery batteries in Pooneryn. The Sri Lankan troops walked into a well-laid trap.
International community pushes for talks
Watchers of the peace process say that the international community may now be motivated to put pressure on the two sides to go for talks.
The United States had said on Wednesday that it was "deeply concerned" about the on-going violence, which put the ceasefire agreement "at risk."
"We call upon both sides to cease hostilities immediately and foster an environment that is conducive to holding productive discussions in Geneva," said the State Department spokesman Sean McCormack in Washington.
McCormack reiterated the United States' commitment to Norway's mediatory efforts and to the stand of the Co-Chairs of the Tokyo Donors' Conference on the Sri Lankan peace process.
The Norwegian Special Envoy Jon Hanssen Bauer is to visit Sri Lanka again next week to give the talks process a further impetus.
The Japanese Special Envoy, Yasushi Akashi, will also be in Sri Lanka next week and this could have an effect on the Sri Lankan government if not the LTTE, because Japan is the largest investor in Sri Lanka.
Opposition says peace is a condition for cooperation
There is now a growing domestic constituency for peace, which the Sri Lankan government cannot afford to ignore.
The Leader of the Opposition United National Party (UNP), Ranil Wickremesinghe, met President Mahinda Rajapaksa on Thursday and told him that his party would support the government and the annual budget due in November, if there was progress in the peace process.
Wickremesinghe was responding to Rajapaksa's invitation to join the government taking ministerial portfolios for the sake of national unity in the hour of crisis.
The Working Committee of the UNP would be taking up the issue of joining the government at its next meeting on Monday, Wickremesinghe said.
However, it seemed to be clear that Wickremesinghe himself would rather link participation in the government to progress in the peace process.
"Without peace there can be no economic development. No economic plan will succeed in the midst of war. It is therefore important to bring peace first," he said.
He pointed out how the economy did well in the two years of ceasefire, between 2002 and 2004 when he was Prime Minister.