President Chandrika Kumaratunge appointed former army commander, General Rohan Daluwatte as the Chief-of-Staff of defence as heavy fighting between the government troops and Tiger rebels continued in the northern province.

Daluwatte appointment follows, the appointment of Major General Janaka Perera as Overall Commander of north and east province. Military officials said Daluwatte would be in charge of anti-terrorist operations throughout the country.

The appointments came hard on the heels after heavy fighting at the gates of Elephant Pass military complex escalated. The government is tight lipped on the on going fighting since it would hurt ruling PA government's chances of being re-elected at the general elections which is expected to be held in September this year.

The operational headquarters in Colombo said that government had deployed ground attack aircrafts to attack the LTTE positions as heavy hand-to-hand fighting continued. It claimed that four soldiers including two officers were killed in action.

It further claimed that at least 30 rebels were killed and believed large number were wounded. The local media continued to keep a "low profile" since carrying articles on war related matters is a punishable offence under the country's emergency regulations.

On an invitation by the LTTE, a Norwegian government delegation is expected to arrive in Sri Lanka to hold talks with the leader of the LTTE within the next few days, a London based Tamil newspaper said.

The newspaper, The Tamil Guardian quoting, LTTE's international spokesman Anton Balasingham said that Norwegian delegates will pay a courtesy call on Prabhakaran to bring the on going war to an end.

"The LTTE leadership has extended the invitation and the Norwegian government has agreed to send a good will team to Wanni", the newspaper quoting Balasingham said.

Sri Lanka has incurred a war cost amounting to two years of annual GDP (at 1996 rates), a report by the Institute of policy studies said here. The reports titled "The Economic cost of the war in Sri Lanka" stated that up to 75,000 persons have died in the on going conflict since 1983, which had cost the successive governments heavily.

"The human and social costs, disability, dispossession and psychological trauma associated with violence and terror are not really quantifiable," the report added.

An "enterprising" hooch manufacturer who ran his business just a few yards from President Chandrika Kumaratunge's official residence was fined Rupees 30,000 by a Colombo magistrate on Thursday.

The manufacturing plant was raided at Colpetty on Tuesday. During the raid police seized 10,000 bottles of "moonshine" and several equipment used for the "lucrative" business.

A high ranking police official told the Lacnet that the entire police department was baffled as to how the businessman operated without being checked by the law-enforcement authorities.

The den was discovered just behind the "foreigners only" Ballys casino.

The Sri Lankan Army said on saturday (22ND) that it cannot confirm or deny claims by tamil rebels that they have captured the crucial Yakachchi army camp north of Elephant Pass. "All the commanders are on the field and there is a problem with communications. I know that the LTTE has claimed that Yakachchi is in their hands. But I cannot confirm or deny it. I have no information from the North on this up to know" Military spokesman Brigadier Palitha Fernando told Lacnet news service at 10.30 GMT.

Tamil rebels in a statement issued from their London Office on Friday night claimed that the Yakachchi army base has fallen to their hands.Military sources in Colombo however confirmed that heavy fighting was continuing in the peninsula for the third week as the rebels launched fierce attacks on army defenses on the main supply route between the Elephant Pass Camp and rest of the Peninsula.

The rebels mounted a massive,multi-pronged assault on defense positions of Yakachchi on thursday after a 72 hour lull in the fighting.

Yakachchi is strategically important to maintain the Elephant Pass camp since the only fresh water wells are located in Yakachchi. If Yakachchi falls to the rebels the Elephant Pass camp would be without fresh water.

Meanwhile President Kumaratunga who is on a private visit abroad made more changes in the army high command as the situation in and around Elephant Pass army camp deteriorated.General Rohan Daluwatta a former Army Commander has been appointed as Chief of Defense staff placing armed forces chiefs and the IGP under his command. General Daluwatta Will now be in charge of all military operations conducted against the tamil rebels.

His appointment came 24 hours after the government rushed two of their top field commanders to the North. Major General Janaka Perera ,the deputy chief of Staff of the Army was appointed as overral operations Commander for both Jaffna and Wanni on Thursday. General Perera, a highly regarded field commander has been side lined in recent months due to differences with the political leadership. The army has also rushed Major General Sarath Fonseka another highly regarded officer to Jaffna naming him as Jaffna Commander.

A Sri Lankan Airlines flight from London's Heathrow airport to Colombo was delayed by four hours on Thursday following the threat of a hijack, a spokesperson for the airline said in Colombo. Air line officials in London reportedly received the threat on the phone minutes before the plane was scheduled to take off. The flight was delayed until British and Sri Lankan official investigated the threat. The flight took off four hours later when the officials came to the conclusion that it was a hoax.

Environmentalists are to take legal action against the Ministry of Forestry and Environment for approving the controversial Upper Kotmale hydro power plant. The Environment Foundation Ltd, has decided to initiate legal action for granting approval for the 150 MW electricity project. The environmentalists have been protesting against the project arguing that it threatens the existence of seven of the country's leading waterfalls.

The Sri Lanka Army today faced a major setback as rebel forces after two days of heavy fighting overran all Sri Lanka Army camps at Yakachi and Elephant Pass.

The LTTE in a press release form London said over one thousand SLA troops were killed in the ferocious battle and the remaining troops of the 54 division fled in disarray.

Independent military sources confirmed that Elephant Pass and Yakachi fell to the rebels today and that the army is withdrawing from the area.

The LTTE in its statement says, Yakachchi and Elephant Pass bases forming the giant military complex of the Sri Lankan army on the gateway to Jaffna fell to the combat formations of the Liberation Tigers this afternoon following 48 hours of fierce and bloody fighting."

The rebels claim that Tiger forces and commando units stormed into the Yakachi military base in the early hours of the morning in a multi-pronged assault and overran the well-fortified camp after several hours of intense fighting. The LTTE commandos, who penetrated central base, destroyed several artillery pieces, tanks, armoured vehicles and ammunition dumps.

The rebel statement adds, "LTTE fighters are now in full control of the Yakachchi-Elephant Pass sector and have amassed a huge haul of heavy weapons, ammunition and military vehicles.