The Brussels-based International Crisis Group (ICG) has asked Sri Lanka's donors to "reassess" their aid to the island in view of the gross violation of human rights by both the government and the LTTE.
"Until that action is forthcoming, the victims of violence perpetrated by the state, the LTTE and other armed groups have nowhere to turn," the ICGs report dated June 14 said.
The government's policies "far from bringing to an end the conflict through the defeat of the LTTE, seem likely to prolong the war, engendering a new generation of embittered and damaged youth in all communities."
"The broad impact of human rights abuses on society is already evident, with rising crime and lawlessness apparent throughout the country."
"Far from weakening the LTTE, the government's dirty war seems likely to strengthen its support and stimulate more funding from the Tamil diaspora."
As regards the LTTE, the report said, its abuses undermined "any claims to represent the Tamil people."
"As the state decays, corruption and criminal influence on the political system have increased. While attacking moderates who are critical of the government's approach, the administration has given space to nationalist extremists, who provoke further inter-communal strife."
"The government faces a severe security threat, which it has a legitimate rights to address. However, its policies are doing little to improve security and are fuelling antagonism among moderate Tamils and other minorities towards the state."
"Many moderate voices are being silenced through coercion and fear, while extremists on both sides are encouraged."
"Officially approved impunity makes all communities insecure and further undermines law enforcement and the judicial system," the report said.
"The international community can longer afford to simply to repeat formulaic criticisms of the government's human rights violations and express hope that political proposals will be forthcoming."
"More urgent action is needed including support for a resolution in the Human Rights Council, an across the board reassessment of aid policies and support for more international involvement in monitoring abuses."