Sri Lanka's Tamil Tiger rebels failed to let hundreds of thousands of civilians leave the island's northeastern war zone before a government deadline, the defence ministry said on Sunday.
President Mahinda Rajapakse had given until on Saturday night for the Liberation Tigers of Tamil Eelam (LTTE) to allow the civilians to move to safety.
"LTTE terrorists continued worsening suffering of the thousands of civilians entrapped in the outskirts of Mullaittivu, ignoring the 48-hour ultimatum served for the safe passage of civilians," the defence ministry said.
It did not say what action the military would take after the "ultimatum" to the Tigers, but military officials reported skirmishes and exchanges of gunfire in the territory still held by the retreating guerrillas.
The government has declared a 35 square kilometre (13 square mile) "safe zone" where civilians can take shelter.
The exact number of people trapped by the fighting is not known, with the government estimating the figure at 120,000 while the International Committee of the Red Cross says it could be about a quarter of a million.
"Terrorists are manning a forward defence line in the outer perimeters of the Safe Zone, which is also said to be cluttered with land mines clamping any civilian attempt to reach the liberated areas," the defence ministry said.
The government has urged international aid agencies to pressure the Tigers to free the civilians, as the military is poised for what it calls the final offensive against the Tigers.
The military during its operations against the Tigers in the past three years has reduced the area under guerrilla control to 300 square kilometres (110 square miles) from some 18,000 square kilometres (7,000 square miles).
The UN arranged an evacuation of some 350 wounded people and their immediate relatives last week while the Red Cross is trying to arrange a similar evacuation.