Sri Lanka chases money without conditions

GALLE, Jan 30, 2007 (AFP) - Sri Lanka will lose millions of dollars unless it moves to end its bitter conflict with the Tamil rebels, diplomats and officials warned as a crucial review of international aid entered its second day. President Mahinda Rajapakse on Monday assured donors of a peaceful solution to end the Tamil separatist conflict.

However, the government has also said it wants to building on recent military gains.
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But the government appeared determined to resist pressure from international donors and lenders conducting a two-day review of aid to end a conflict that is seriously damaging the economy of the embattled country.

The United States, a key backer of the island's faltering peace efforts, led international concern that Sri Lanka was slipping back to full-scale war as security forces gained ground over Tamil rebels.

"We remain unwavering in our conviction that there can be no military solution to this terrible conflict," said Robert Blake, US ambassador to Sri Lanka.

He urged Sri Lanka to "seize the opportunity to forge a power-sharing deal that can form the basis for talks" with the separatist Liberation Tigers of Tamil Eelam (LTTE), at a time when the Sri Lankan military has vowed to step up attack