The Tamil Tiger rebels accused the Sri Lankan military of shelling one of their camps.
They said a civilian was also wounded in the attack on Tuesday -- a day after a suspected rebel blast killed five people, in the latest violence to threaten the 4-year-old ceasefire.
The military denied the accusation.
"We have not carried out any attack," military spokesman, Brig Prasad Samarasinghe said.
The attack comes just days after the Tigers attacked a rival, breakaway faction, killing several of their fighters.
The rebels said the army had fired artillery at their defence lines in Mutur, close to Trincomalee, a rebel stronghold in the north where Tamil Tigers have battled for decades to carve out a separate homeland for Sri Lanka's ethnic Tamils.
"The army came and attacked our forward defense line," the rebels' Trincomalee political leader, S Elilan said.
He added that the Tigers returned fire.
"The battle lasted for one hour and one civilian was caught in the crossfire in 2002 and was wounded," he said.
There was no independent account of the attack, which comes amid an upsurge in violence that has derailed peace talks between the rebels and the government and pushed the country to the brink of a return to civil war.
{{/usCountry}}There was no independent account of the attack, which comes amid an upsurge in violence that has derailed peace talks between the rebels and the government and pushed the country to the brink of a return to civil war.
{{/usCountry}}A local police official, M Mohamad said he had heard the sound of explosions, but because the sounds came from rebel-held territory, police did not investigate.
In the past, mainstream rebel camps have come under attack from a renegade faction which broke away from the north-based Liberation Tigers of Tamil Eelam in 2004.
The Tigers claimed to have suppressed the uprising, but sympathy for the breakaway leader, Karuna, remains strong among some Tamils in the east.
On Sunday, the mainstream group attacked three of the Karuna faction's camps, and said they killed 15 rival fighters.
The breakaway group admitted to five deaths and said they killed nine rebels from the mainstream group.
Monday's roadside bomb in Trincomalee was apparently targeting a military patrol, but a motorized rickshaw took the force of the blast, and four civilians and a naval soldier were killed.