A 2002 cease-fire still exists on paper, but it fell apart in 2006 as renewed fighting killed more than 3,600 combatants and civilians.

On Wednesday, the 75-meter-long (250-foot-long) smuggling ship exploded and sank in flames after the navy attacked it in a major shipping lane off Matara district, 130 kilometers (80 miles) south of the capital, Colombo, said military spokesman Brig. Prasad Samarasinghe.

``Two naval ships patrolling in the area ordered this vessel to identify itself, as it did not have a flag and it was sailing toward Sri Lanka - ,'' said navy spokesman Commander D.K.P. Dassanayake.

He said the navy had contact with the ship, obtaining a name and registration number, and checked the information with an international registry.

The navy found the information to be false and ordered the ship to halt immediately, Dassanayake said.

``They did not stop,'' he said.

Instead, he said, the ship changed course to head away from Sri Lanka - , he said.

``The navy fired warning shots, and they fired at the navy, for which we retaliated,'' Dassanayake said. ``The ship caught fire and started sinking.''

He said the ship was believed to have had at least 12 crew members, who would have been unlikely to survive the huge explosions from the ammunition it had been carrying.

On Tuesday night, the navy sank two Tiger boats from a flotilla that had tried to sail southward to target naval craft and installations, Dassanayake said.

The other half-dozen rebel vessels from the flotilla quickly retreated, but at least 16 rebels were believed killed, Dassanayake said.

Meanwhile, he said, Sri Lanka - 's air force had attacked a rebel base in an eastern jungle on Tuesday, but there was in information available about any casualties or damage. Discuss this story Published: Wed Feb 28 07:54:12 EST 2007

``We repeatedly tried to check the identity of the vessel, but neither will it give one, nor will it stop forcing us to take action,'' military spokesman Brig. Prasad Samarasinghe said of the incident near Matara.

``Our people are hearing the loud sound of explosions, suggesting the ship was carrying explosives or other warlike materials,'' Samarasinghe said, adding that the military suspected the separatist Tamil Tiger rebels were trying to smuggle in arms and ammunition. Discuss this story Published: Wed Feb 28 00:20:35 EST 2007

The helicopter used by U.S. Ambassador Robert Blake and his Italian counterpart, Pio Mariani, had just landed in Batticaloa district when several mortars landed close to the aircraft, said Sri Lankan government minister Mahinda Samarasinghe, who accompanied them.

``Both the ambassadors are fine and they have suffered slight injuries,'' Samarasinghe said.

A small piece of shrapnel was removed from Mariani's head and he was later discharged, said Dr. K. Muruganandan of Batticaloa's government hospital.

The Tamil Tigers admitted firing the mortars, but blamed the Sri Lankan military.

``I express our regret at this unfortunate incident,'' Rasiah Ilanthirayan, the spokesman for the Tamil Tiger rebels, said from the insurgent headquarters in Kilinochchi.

He said the Sri Lankan army has used the same landing area to launch attacks on Tamil targets, and rebel fighters attacked the helicopters fearing further military assaults.

``Even this morning they had used the place to launch artillery fire at us,'' he said. ``Our people were not informed of the diplomatic movement ... This is a criminal negligence on the part of the Sri Lankan military.''

The two ambassadors, accompanied by their staff and Sri Lankan officials, had traveled Tuesday morning to Batticaloa aboard the helicopters to attend a meeting about the development of the area, a hotbed of separatist violence.

Samarasinghe's press officer, Lal Sarath Kumara, who was in the first helicopter to land, said the attack started shortly after his aircraft touched down in a deserted playground and its occupants disembarked.

``We escaped narrowly,'' Kumara said, adding everyone initially hit the ground after the attack began before taking cover.

``Everyone ran in various directions. There was huge chaos there and all the people were in fear. People were screaming and running.''

Kumara said he believed at least six shells hit the area.

The U.S. Embassy in a statement said Ambassador Blake was ``all right,'' without providing further details.

Japanese Ambassador Kiyoshi Araki, who was with the ambassadors in the second helicopter, was unhurt, a Japanese Foreign Ministry statement from Tokyo said.

Seven Sri Lankan security personnel on the ground were wounded, said Lt. Col. Upali Rajapakse, a senior officer the Defense Ministry's information section.

Associated Press Writer Bharatha Mallawarachi and Krishan Francis contributed to the report. Discuss this story Published: Tue Feb 27 07:11:07 EST 2007