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Sri Lanka's Supreme Court blocking a land-mark aid sharing deal among the island's warring parties is seen by diplomats and analysts as the worst setback for the already faltering peace process. Hopes of using the aid deal signed three weeks ago for confidence building was dashed when the court Friday effectively scuttled what is known as the Post-Tsunami Operational Management Structure (P-TOMS), diplomats said.
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Top officials and diplomats close to Sri Lanka's Norwegian-backed peace initiative said they were surprised by the court ruling which dimmed prospects of an early breakthrough in getting the parties back to the negotiating table.
Both Colombo and the LTTE had seen the deal as a stepping stone to resuming talks that have been stalled since April 2003 and save an Oslo-brokered truce that is faltering.
"The unfortunate fallout of this is the strengthening of the LTTE's claim that they can't function under the Sri Lankan state," a Western diplomat close to the peace process said.