On Saturday, both sides agreed to discuss ``fiscal aspects of a federal structure'' at the next round in Japan on March 18-21 which will set the stage for a major donor conference in Japan in June.

``The parties once again appealed to the international community to make funds available for immediate humanitarian and rehabilitation need,'' the joint statement said.

The money is crucial to bolstering the peace process, which has faced criticism from opposition political parties for not showing enough tangible results.

An agreement with the World Bank that will release international aid for the country is expected to be finalized next week.

``Sri Lanka - 's peace process is a refreshing example to the world and we appeal with one voice for aid to rebuild the country,'' government chief envoy Gamini Peiris said.

Just hours before talks began Friday at the Norwegian Embassy in Berlin, they were clouded when two Norwegian truce monitors and a female interpreter were forced to jump overboard after inspecting a rebel boat they said was smuggling weapons into Sri Lanka - . The three rebels aboard set fire to the boat and blew themselves up.

Balasingham denied the rebels were smuggling weapons and said the gun boat had gone to help a fishing boat that had reported engine failure at sea.

He accused the Sri Lankan navy and truce monitors of mishandling the incident appropriately, but said it had ``not affected the spirit of the process.''

Both sides are keenly aware that the talks are their best chance yet to end the conflict and that a reversal toward war would turn away international aid.

``What is important is the parties' firm resolve to hold fast to the process,'' Peiris said.

(dss-tc) Published: Sat Feb 8 17:47:58 EST 2003

Rebel and government envoys agreed Saturday to begin discussing ``fiscal aspects of a federal structure'' at the next session. They also agreed to set up committees in three eastern district to address land issues and other grievances by Sri Lanka - 's Muslims.

The panels will consist of six representatives each of the Muslims and the Tamil Tiger rebels, the statement said.

Human rights figured for the first time in the latest round of talks, the fifth since negotiations began in September after a cease-fire brokered by Norway a year ago.

Human rights groups have blamed the Sri Lankan government and the rebels for the deaths and disappearances of hundreds of civilians during their ethnic conflict, while the Tigers have been fiercely criticized for recruiting children as combatants.

On Friday, both sides entrusted a former head of Amnesty International, Ian Martin, with drafting a human rights ``roadmap'' that will govern the negotiating process and is intended to include provisions to monitor human rights.

Martin declined to give details, but Saturday's statement said the blueprint should include ``commitments to be implemented throughout the negotiating process'' and would be prepared in time for the next session in Japan next month.

``The parties have indicated a wide-ranging intention to review a whole schedule of human rights issues that will arise at different points of the process,'' Martin, who was invited by both sides to function as an adviser, said Saturday.

The Tamil rebels, accused of using children as young as 12 to fight, pledged in the statement to make an ``intensified effort'' to stop recruiting child soldiers.

The rebel group ``restated its pledge to bring such a practice to an end'' and ``agreed to a complete cessation ... of recruitment campaigns aimed at persons under 18 years of age,'' the joint statement said.

The two sides also agreed to let UNICEF supervise a joint government-rebel program to rehabilitate child soldiers by helping them to reintegrate into their families and community.

(dss-tc) Published: Sat Feb 8 13:42:09 EST 2003