The island's government accused the Liberation Tigers of Tamil Eelam (LTTE) of firing heavy artillery and mortars from an area it has designated as a civilian "safe zone," and that its troops were retaliating.
The United Nation says up to 100,000 civilians are trapped in the area in "dire humanitarian conditions.
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"The LTTE terrorists continued mounting heavy artillery and mortar attacks from the no-fire zone at troops now advancing towards the general area of Vellamullivaikkal," the defence ministry said.
It said at least eight rebels were killed and another nine wounded in fighting on Friday, but did not say if its troops suffered any casualties.
The latest fighting came as the UN renewed its call for a fresh ceasefire to allow civilians trapped in the conflict zone to get to safety.
"UNICEF is calling for a ceasefire and for a humanitarian pause which allows humanitarian workers to access the conflict zone and for civilians who are trapped in this zone ...
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