Peiris, who is also constitutional affairs minister, warned that the political standoff could affect the island's budget, which had counted on substantial foreign aid.

The decision of the International Monetary Fund to delay the release of US$81 million in aid will also have ``very negative repercussions on Sri Lanka - 's economy,'' he said.

The IMF loan was expected after the government presented its annual budget on Nov. 12, but the organization has postponed the payout until the political turmoil subsides.

Wickremesinghe signed a Norwegian-brokered cease-fire agreement with the Tamil Tiger rebels in February 2002, bringing an end to nearly two decades of fighting that has claimed 65,000 lives. So far, the truce has largely held.

But on Wednesday, Wickremesinghe urged Kumaratunga to re-negotiate the truce to suit the current power balance as well as to take over the peace process. Kumaratunga has refused.

``The prime minister cannot be held responsible when he doesn't have the power and authority,'' Peiris said. ``We cannot guarantee a cease-fire in which we have no control over the armed forces.''

He said if Kumaratunga intends to hold on to the three portfolios she should introduce amendments to the truce agreement.

``There cannot be shackles, impediments and obstacles thrown before the prime minister if he is to take the peace process forward,'' Peiris said. Published: Fri Jan 9 12:11:44 EST 2004

Subasinghe said, "Without understanding current and future threats and adversaries, it is well nigh impossible to formulate effective policy or practical responses". He appealed to the international community for rapid implementation of all existing UN conventions, which provide a solid legal framework for global efforts in the fight against terrorism

The 2004 Ambassadors Forum comprised participation by a cross section of diplomats, US government officials, academics and journalists and was titled "International Cooperation in Combating Terrorism - An Agenda for the 21st Century". Michael S. Swetnam, Chairman and CEO of the Board of the Potomac Institute delivered the opening remarks and Prof Yonah Alexander, Director, International Center for Terrorism Studies chaired the forum. . The Potomac Institute of Policy Studies is an independent, non-profit making public policy research institute. The Institute's current endeavors have required the formation of special efforts in terrorism and asymmetry, emerging threats and opportunities and security. Published: Thu Jan 8 20:24:48 EST 2004