"War or peace, we are ready," the president said in an interview with the state-run Daily News.
"It is in their hands. It is now up to the Tigers to decide which path they want to tread on.
"We have never hesitated to negotiate and we never left the negotiating table. It was the LTTE which always abandoned talks midway.
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The government Thursday marked the capture of the Tigers' final bastion in the east of the island with a military parade and the launch of an ambitious reconstruction program in the region.
The president said he hoped an all-party initiative here would come up with a plan to address demands for greater autonomy in the Tamil-majority areas of the island's north-east.
"It will be a collective effort of all political parties. All political parties must make a healthy contribution... to make th