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"We have faced this challenge squarely without avoiding it. Our security forces are today achieving victories against terrorism unprecedented in history.
Terrorism is receiving an unprecedented defeat," the president said.
Last month the Sri Lankan government pulled out of a tattered truce with the Liberation Tigers of Tamil Eelam (LTTE), who are fighting for an independent ethnic homeland in the north and east of the Sinhalese-majority island.
But the worsening fighting, as well as mounting international concern over the human rights situation in Sri Lanka, has led to threats of cut in foreign aid to the island.
Rajapakse, however, appeared to brush off such warnings by asserting that Sri Lanka has "established new relations with our neighbouring states, Arab states and Buddhist states."
"Our neighbouring states trust us. Our problems and issues are also problems and iss