Liberation Tigers of Tamil Eelam rebels and the Sri Lankan Army fought land and sea battles in the country's northwest region on Saturday, leaving at least 42 people dead, further rupturing a ceasefire that was hanging in balance.

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Government troops destroyed eight of the 11 boats from which LTTE [Images] rebels launched attacks in Mannar Island, the seaboard along the narrow of strip of water separating the country from India. Defence Ministry said at least 30 rebels were killed while the navy lost six men in the sea battle.

Hospital officials said five civilians caught up in the cross fire also died while a suspected rebel took cyanide to avoid capture, raising the day's official toll to 42. But rebels rejected the Defence Ministry version on Saturday's battles, claiming they did not lose even a single combatant and that only two cadres were wounded.

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The LTTE also claimed in statement that they had killed 12 navy sailors. The Tigers attacked a naval patrol craft in a flotilla of 11 boats off the coast of Mannar, which is close to the Palk Straits, the sea boundary dividing India and Sri Lanka [Images]. The rebels also shelled a police station at Pesalai in Mannar islet and security forces retaliated with artillery.

The pitched battles follow two days of air raids by government troops triggered by the killing of 64 bus passengers in a suspected rebel landmine attack on Thursday in Anuradhapura.

A mass funeral was held on Friday for victims of the bus attack, the worst involving civilians since the 2002 truce was signed. Government blamed the LTTE for the blast, but the tigers have denied involvement.

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The pro-rebel Tamilnet website said at least 30 civilians were wounded in Saturday's battles but the Defence Ministry put the figure between 15 and 20.

Police also reported a huge explosion, possibly at mid-sea, off the coast of Negombo district located south of Mannar.

Two suspected rebels with diving equipment were arrested along the beach and they had taken cyanide, police said. The two were in a critical condition and admitted to hospital where one succumbed to injuries.

In another development, police recovered two powerful bombs near a coastal town about 60 km north of Colombo. The defence ministry said it suspected that the Tigers may have been planning a suicide mission against an unspecified target and their plans may have gone wrong.

The escalation of violence came even as the international community asked the warring sides to resume peace talks. In a statement released in Austria on Friday, the European Union condemned Thursday's bus attack and asked the two parties to end violence.

"The EU calls upon all parties to put an end to violence and to return to the negotiation table with a view to strengthening the immediate cease-fire and working towards a durable political solution of the conflict, so as to relieve the Sri Lankan people from the ordeal of 20 years of persistent conflict," the statement said.

It also said the bus blast was a clear violation of the 2002 ceasefire agreement.

"This abhorrent act of violence, which marks the bloodiest attack on civilians since the signing of the ceasefire agreement in 2002, is another clear violation of that agreement," the EU said.

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