Government troops and Tamil rebels exchanged mortar fire in the Northern Jaffna Peninsula as the army attempted to re-link the main supply route from Jaffna to the strategically important Elephant Pass army camp. Military spokesman Brigadier Palitha Fernando said the troops had to clear 400 meters more of the Jaffna-Kandy road to re-establish the supply line. 20 soldiers were injured by mortar fire over night while the army says it killed two rebels and killed or injured more in retaliatory mortar fire.Over 400 soldiers and rebels have been killed in intense fighting for over the last two weeks when the tamil rebels infiltrated large number of fighters and cut off the main supply line to the Elephant Pass army camp situated at the entrance to the Peninsula. The Elephant Pass camp is the main obstacle to rebel plans to re-capture the Jaffna peninsula from the army which took control of the area in June 1995.

President Kumaratunga has left Colombo reportedly to Europe while Opposition leader left for Egypt temporarily suspending talks aimed at reaching a consensus on a new constitution for the country. Sri Lankan Newspapers reported that the President would tour a number of European nations on a private visit and possibly visit the United States for medical treatment. The President lost her right eye and injured her left eye in the December 17th bomb attack in Colombo. Official sources said the President is due back in the first week of May while the leader of Opposition is due back by the end of April. The next round of talks are expected to begin soon after the President's return. The United National Party said earlier that it was highly unlikely that the two parties could reach agreement by May 15th, the deadline set by the President to reach a consensus.

President Kumaratunga says she is determined to end terrorism in the New year and pledged to lay the foundation for a genuine democracy to meet the hopes aspirations and expectations of all people. In her New Year Message to the country, President Kumaratunga said it was necessary to set aside all that divided us as a people and divert attentions. She urged the People to join together with the singular commitment to overcome terrorism.

Opposition leader Ranil Wickramasinghe urged that the country dedicate itself to ending the north east conflict and establishing a permanent peace. Mr.Wickramasinghe said the first national New Year in the new millennium should be the starting point in carrying the traditional values throughout time.

India based probe mission into the boat disaster off Malta on Christmas eve 1996 has urged President Kumaratunga to take legal action against travel agents and other conspirators involved in the tragedy. 565 people including 70 Sri Lankan illegal immigrants were killed in this incident. The probe commission says unemployed youth mostly from the sub continent were promised lucrative employment in Europe and charged two to three hundred thousand rupees to be smuggled into European countries. The over crowded ship sank in international waters in the Malta-Sicily canal. Of the 565 people killed 70 were Sri Lankans, 170 were Indians and 33 were from Pakistan.