Sri Lanka's navy Wednesday clashed with rebel Tamil Tiger vessels off the island's northern coast of Jaffna, sinking 11 rebel boats and leaving at least 40 guerrillas dead, the defence ministry said.
A dozen naval fast attack craft, backed by helicopter gunships and Israeli-built Kfir fighter jets, confronted a flotilla of 16 rebel boats, the military said.
"The navy destroyed 11 Tiger boats, including two suicide boats during the operation. We estimate around 40 Tigers were on those boats and they have been killed," military spokesman Brigadier Udaya Nanayakkara said.
Sri Lanka's defence ministry said the boats of the Liberation Tigers of Tamil Eelam were attempting to transport arms to rebels off Delft island.
The military did not give its own casualty figures but said one naval craft was damaged during the explosion when the two rebel boats were destroyed.
However, the rebels claimed they had sunk a navy fast attack craft and damaged two naval boats during the sea battle which lasted nearly three hours, the pro-rebel Tamilnet.com web site reported.
"Four Black Sea Tigers were killed in action," Tamilnet.com said quoting rebel military spokesman Rasiah Ilanthiriyan.
Both sides regularly make sharply differing claims about casualties and independent verification is rarely possible.
The sea battle came as the navy earlier Wednesday detained a "suspicious" Indonesian-registered vessel off the island's east coast, navy spokesman DKP Dassanayake said.
The merchant vessel named MV Le Wing was carrying a 12-member Indonesian crew and had been drifting for nearly 15 days when the navy detected it.
Dassanayake said the navy's suspicions were aroused as the ship appeared to be of the type used for arms smuggling by the Tamil Tigers.
"We got suspicious as the crew claimed they were drifting due to lack of fuel," Dassanayake said.
The Indonesian crew have since been brought to Colombo for further questioning as authorities try to trace the vessel's owners, he said.
Sri Lanka has stepped up naval patrols to intercept Tamil Tiger rebels smuggling weapons.
In October, the navy claimed it had virtually destroyed the ability of the Tigers to smuggle weapons to the island after sinking what it said was the rebels' last gun-running ship.
Sri Lanka is pressing for a military victory over the Tamil Tigers, who are fighting for a separate homeland for the ethnic Tamil minority in the Sinhalese-majority nation.
President Mahinda Rajapakse vowed in a public speech Wednesday to defeat the rebels militarily before any new peace talks.
"We are for a political settlement. But there is no point in talking about a political settlement without first defeating terrorism," the president said during a ceremony marking the third anniversary of the Asian tsunami.
The tsunami claimed an estimated 31,000 lives in Sri Lanka, where over 60,000 people have been killed in the Tamil Tiger's demand for a separate state for minority Tamils since 1972.
He said security forces had already scored major victories against the guerrillas in the past year and hoped to build on them.