"The 'Jetliner' ferry was making its way to the harbour when the...
attack started," a military official said.
He said five rebel boats pursued the ferry carrying troops returning home on leave but navy gunboats were able to sink three of them, inflicting unspecified casualties on the guerrillas.
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Ground troops also used multi-barrel rocket launchers to neutralise rebel gun positions.
"Four naval ratings were killed and about 30 injured," the military official said on condition of anonymity. "Several buildings caught fire and we are putting them out."
At least 36 explosions were heard from within the naval compound next to the main Trincomalee harbour.
The blasts damaged a navy gunboat, official sources said.
The Tigers had fired both artillery and mortar bombs, officials said.
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Warplanes