Confined to a one-kilometre long stretch, the surviving cadres of the LTTE were on Sunday fighting the army near what was once a safety zone.
The government remained tightlipped about the fate of LTTE chief, V Prabhakaran.
A body believed to be that of Prabhakaran was found but the identity of the corpse was yet to be confirmed.
President Mahinda Rajapaksa announced in Jordan on Saturday that he would return to a country free of LTTE.
He returned to a thunderous welcome as crowds outside the Bandaranaike International Airport waved national flags and cheered. But Rajapaksa made no public statement.
The LTTE claimed to have ended their armed struggle.
“We can no longer bear to see the blood of our people being spilled,” LTTE leader Selvarasa Pathmanathan said in a statement.
Rajapaksa would address the nation from Parliament on Tuesday, it was announced, late in Sunday.
“They are taking the body for checks to confirm it is the real Prabhakaran,” a military official told Reuters on conditions of anonymity. Four other military sources confirmed the recovery to Reuters but said identity checks were under way.
The President’s brother and senior advisor, Basil Rajapaksa was reluctant to say that the war against the LTTE was completely over. “Yes, terrorism is over. There a few terrorists still inside. The army has to say that the fighting is over. But they (the LTTE) cannot act outside the area. 99 per cent of the land is now free (of the LTTE),’’ he said.
On the contrary, heavy fighting that had resumed between the rebels and the army early on Sunday continued late into the evening.
The rebels, confined within 1 km, had launched an attack on an army formation with boats and suicide cadres across a lagoon that separates them and the government troops.
A military officer confirmed that while the cadres were cornered, they had managed to breach a defence line of the SLA troops. He said that some 200 LTTE cadres were involved in the attack and were trying escape to the jungles of Mullaitivu. There was no confirmation of SLA casualties.
The LTTE claimed to have ended their armed struggle – at least for this phase of what they call the IV Eelam War – for a separate nation state for the Tamil community in Sri Lanka.
But there was no mention of surrendering arms – a pre-condition laid down by the Lankan government before any talks with the LTTE could be initiated.