The clashes followed on from fierce hand-to-hand battles over the weekend that left scores of combatants dead along the front lines that separate government areas from the mini-state run by the Liberation Tigers of Tamil Eelam (LTTE).
"The army conceded the territory they had recently captured along the Mannar and Vavuniya defence lines," a top military officer who declined to be named said of Sunday's fighting.
"Security forces were too thinly spread when the Tigers attacked," he said.
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The guerrillas, who have been fighting for an independent homeland since 1972, said they had smashed at least four positions, captured weapons and drove off with at least two army vehicles, including an armoured personnel carrier.
Both sides offered conflicting accounts and casualty figures, but agreed that it was the bloodiest fighting in recent months.
The Tigers claimed that they killed 30 soldiers and placed their own losses at 18, while the military claimed to have killed at least 52 Tigers a