Sri Lankan security forces resumed their offensive against Tamil Tiger rebels in the north of the island on Wednesday following a brief holiday ceasefire, the two sides said.
The navy attacked two Tamil Tiger boats that tried to approach the coastline on Wednesday, killing at least 10 guerrillas, navy spokesman Captain DKP Dassanayake said.
The sea battle came at the end of a 48-hour ceasefire declared by President Mahinda Rajapakse to coincide with the traditional New Year shared by both majority Sinhalese and the minority Tamils.
A military official said government forces were involved in "normal operations" aimed at finishing off the last of the Tigers, who are facing defeat after 37 years of fighting for an independent Tamil homeland.
The army said in a statement that two soldiers had been killed by the Liberation Tigers of Tamil Eelam (LTTE) during the
ceasefire. The attack was launched from a government-designated "no-fire zone," the army said.
"Belittling the 48-hour humanitarian pause declared by His Excellency the President... LTTE snipers in the 'no-fire zone' fired and killed one more soldier on Tuesday morning," the army said.
It said another soldier was killed by Tiger snipers on the first day of the ceasefire while many more were wounded.
Military officials said troops did not retaliate during the ceasefire period.
The pro-rebel Tamilnet website said both sides launched attacks as the suspension of hostilities ended at midnight and that at least 180 civilians were killed by military rockets and artillery fire on Wednesday morning.
Army spokesman Brigadier Udaya Nanayakkara denied army shelling. "We have not engaged in any offensive today," he told AFP.
Battlefield casualty claims are impossible to verify as reporters are not allowed to travel freely in the conflict zone.
The LTTE, which once controlled around a third of the island, are now boxed into a narrow strip of coastal jungle in the northeast where they are vastly outnumbered.
On Tuesday the rebels said they were ready to negotiate a permanent, internationally-backed ceasefire with the government and restart peace talks to end the suffering of civilians.
But the offer was quickly rejected by the government, with officials accusing the rebels of trying to buy time to regroup and President Rajapakse saying his troops were on the verge of total victory.
Military sources said Wednesday that troops were positioned around the "no-fire zone," but had not entered the area.
The army says remnant LTTE forces have retreated into the safe zone, and are using tens of thousands of civilians as a human shield. It said only about 250 civilians escaped during the brief truce.