"We want the LTTE (Liberation Tigers of Tamil Eelam) to become a stake-holder in the peace process" launched in 2002, Rohitha Bogollagama told reporters in New Delhi.
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"But if they adopt terrorism, that we cannot tolerate," said Bogollagama, who was in New Delhi on a brief visit to meet Indian leaders.
Bogollagama's comments Wednesday followed pressure on Colombo from international donors, who this week pledged 4.
5 billion dollars in aid, to return to the negotiating table and start talks with the Tamil Tiger rebels.
"Our government is committed to eliminate terrorism but we are also committed to peace," the minister said, adding later: "We encourage the peace negotiations to begin as early as possible."
The minister's comments came 12 days after the Sri Lankan army captured a key rebel stronghold of Vakarai in the island's east.
The 2002 ceasefire agreement, brokered by Norway, has been repeatedly punctured by fighting between Colombo and the Tigers, who want a separate state for