Arguing the civilians were being used as a human shield, the island's defence ministry said its forces were engaged in what it said was "the world's largest hostage rescue operation undertaken by a conventional armed force in modern times."
The Tigers are hemmed into a narrow strip of northeastern coast, where up to 100,000 civilians are also holed up.
According to the pro-rebel website Tamilnet, ground troops backed by helicopter gunships were "deploying maximum fire power" in an attempt to breach rebel defences.
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The Liberation Tigers of Tamil Eelam (LTTE) have retreated into a 20-square kilometre area that the government had designated as a "safe zone" for beleaguered civilians, and remnants of the rebel army are still resisting.
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The United Nations has said both sides in the long-running ethnic war may be guilty of war crimes, with the government accused of shelling civilian areas and the Tigers of keeping people hostage.
On Wednesday, Britain and France added their voices