Liberation Tigers of Tamil Eelam aircraft bombed two key installations close to capital Colombo early Sunday in retaliation for military air raids on their territory, a rebel spokesman said.

Two aircraft carried out the attacks on oil storage facilities near Colombo, the LTTE spokesman said.

He said two 'squadrons' were dispatched after Sri Lankan Air Force jets had bombed targets in Kilinochchi in the north where the rebels have their headquarters.

One of the installations is the state-owned Ceylon Petroleum Corporation's storage facility in Kolonnawa while the other belongs to Shell in Muturajawela, close to Colombo.

Tiger planes targeted the oil storage facilities because they provided fuel to Sri Lankan forces, the spokesman said.

Authorities in Colombo activated air defences following reports that suspected Tamil Tiger rebel aircraft had entered Colombo's airspace.

Security forces fired anti-aircraft guns and power was switched off as residents watched the country's national team lose to Australia in the cricket World Cup in Barbados.

Troops manning key positions in the capital lit up the night sky with a massive barrage of anti-aircraft fire that shook homes and caused panic, residents said.

Security forces also fired tracer bullets into the air after suspected Tiger aircraft were reportedly spotted flying towards the capital.

Security forces at power stations, a local airport and close to the President's official residence used high-powered guns to thwart the suspected attack, officials said.

Confirming the strike by the Tigers on key installations near Colombo, the Sri Lankan defence ministry said only 'minor damage' was caused in the attack.

"The suspected LTTE aircraft have (dropped) four improvised bombs," the ministry said in a statement.

The two bombs dropped on the oil facility failed to explode, the ministry said.

The air force confirmed a rebel claim that military war planes had bombed the outskirts of the rebel-held Kilinochchi town, hours before the Tigers staged their tit-for-tat attack.

Air Force spokesman Ajantha Silva said the military had information about the place where the Tigers had landed their light fixed-wing aircraft believed to be Czech-built Zlin-143 model planes.

The same aircraft were used to bomb the main airbase located just next to the country's international airport last month. On Tuesday too, the Tigers used the aircraft to bomb the northern military complex of Palaly.