Defence officials say the military is planning to buy MiG-29 supersonic jet fighters, Mi-24 helicopter gunships and bigger guns for navy fast attack craft to counter growing threats from the rebels at sea and in the air.

"There is very little chance of reviving the peace process," said Sunanda Deshapriya, a director of the Centre for Policy Alternatives, describing the February 2002 truce as all but dead.

"I don't think it is possible to salvage the ceasefire. We will see more fighting in the months to come."

The Tigers ended a month-long lull in their attacks last week with the launch of a major sea-borne assault that saw the brief fall of a strategic naval facility on remote Delft island off Jaffna in the north.

Both sides suffered casualties, but defence sources said the bigger loss to the military was a coastal radar station at Delft that was used to track gunrunning across the narrow Palk Straits between India and Sri Lanka.

"The Tigers demonstrated their sea-going capability with the attack on Delft island," defence columnist Namal Perera said. "Their bomb attack in Colombo on the same day also showed that their guerrilla capability is intact."

The state-run Daily News said the Liberation Tigers of Tamil Eelam (LTTE) were preparing to carry out more attacks because they were "desperate" after losing territory in the east of the island in recent months.