The Liberation Tigers of Tamil Eelam (LTTE) said they had launched a "commando style" attack against military defences in the northern district of Vavuniya on Saturday night, destroying artillery posts and ammunition dumps.

"The Tigers have destroyed a Sri Lanka army artillery launch pad, seized military hardware, including ... armoured personnel carriers," rebel spokesman Rasiah Ilanthiriyan said.

Another 35 army troops were wounded by the offensive, the pro-rebel Tamilnet.com website reported.

The Sri Lankan defence ministry said three soldiers were killed and 20 others wounded, raising an earlier tally of one killed and seven wounded.

Neither side's casualty claims could be independently verified and both are believed to inflate the figures.

Ilanthiriyan said that the guerrillas had established a forward defence line near areas previously held by the military following the attack, Tamilnet.com reported.

Sporadic artillery exchanges continued in Vavuniya district, which borders rebel territory, the military and rebels said Sunday. Residents and officials said they had heard heavy shelling since Saturday night.

Japan's special peace envoy to Sri Lanka, Yasushi Akashi, is due to head to the conflict zone during a four-day visit to the tropical island beginning Tuesday, officials and diplomats said.

They said Akashi was hoping to jump start Sri Lanka's now moribund peace process. The envoy, seen as a key figure, in 2003 helped to raise 4.5 billion dollars in pledges to support a Norwegian-backed bid to resolve the conflict.

President Mahinda Rajapakse on Friday said he was willing to resume talks with the rebels even as fighting continued in the troubled northern and eastern regions, where deaths are reported daily.

In more tragedy Sunday two Red Cross workers were found shot dead in central Sri Lanka, a day after they were abducted by men claiming to be from the police, the charity said.

The defence ministry said an investigation was under way into the worst attack against aid workers since the August massacre of 17 local employees of Action Against Hunger, a French charity.

The latest fighting in northern Sri Lanka came as police ordered the eviction of hundreds of ethnic Tamils who have been sheltering in the capital, Colombo, for long periods.

Police Inspector-General Victor Perera announced Friday that Tamils from the embattled northern and eastern provinces were a threat to national security when they spent a long time in Colombo without employment.

The authorities also banned trucks and vans leaving Tamil-dominated regions and travelling to the rest of the country after police said they had discovered a truck packed with over a tonne of explosives.

The government blamed the Tamil Tigers for two bomb attacks in and around the capital last week, which killed nine people and wounded 44. The latest crackdown followed the blasts.