Soldiers entered Puthukkudiriruppu on Friday despite heavy resistance from the Liberation Tigers of Tamil Eelam (LTTE), the defence ministry said in a statement.
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Government forces have pushed the Tigers into a narrow bit of land and have said they hope to completely crush the rebels by April -- a victory that would bring an end to 37 years of armed conflict in the South Asian island nation.
"Troops who have entered Puthukkudiriruppu town perimeter have found LTTE's high-tech satellite communication centre, while further advancing into the built-up area amidst stiff resistance from terrorists," the statement said.
The defence ministry did not say whether troops had suffered any casualties, but said the bodies of five rebels had been found.
The LTTE did not immediately comment on the latest fighting, which has raised concerns for the safety of tens of thousands of civilians trapped in the war zone.
"Estimates vary of the number of civilians trapped, from 70,000 according to