At least as 98 Tamil Tigers were killed and about 100 wounded on Wednesday when government forces repulsed a major attack on Sri Lanka's northern Jaffna peninsula.
Nine Lankan soldiers were also killed.
Troops prevented the Liberation Tigers of Tamil Eelam from capturing a defence line at Kilali on the southern sector of the peninsula, 300 km from the capital, media minister Anura Yapa told reporters, adding, "We have recovered the bodies of 98 Tigers."
He did not give troop casualties, but military sources said at least nine soldiers, including two officers, were killed and 60 more wounded in some of the most fierce battles that erupted since the 2002 ceasefire.
The direct combat came a day after President Mahinda Rajapakse said the door was open to LTTE for peace talks.
Defence spokesman Upali Rajapakse said the military has "successfully repulsed" the offensive by the rebels, who launched the sea-borne attack on army positions at Kilali in the wee hours.
LTTE's Sea Tigers leader Soosai led the group's offensive, sources said.
Heavy shelling was witnessed in the eastern port town of Trincomalee also, where a six-member team of ceasefire monitors was almost hit and was forced to shift base.
A spokesman for the Sri Lanka Monitoring Mission said the monitors' housing was almost hit when the area came under heavy shelling for hours since Wednesday evening.
According to Defence spokesman Rajapakse, at least 700 Tigers and 106 government troops have been killed, and up to 600 rebels and about 170 soldiers wounded since August 11, when LTTE stepped up efforts to retake Jaffna.
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