``For nearly three decades, we were forced to celebrate independence with an illegal armed group operating in our country,'' said Rajapaksa, who spoke from a heavily secured beachfront stage, guarded by tanks and navy ships, as 4,200 decorated service members marched in a military parade. ``We have now been able, within a short period of 2 1/2 years, to completely defeat the cowardly forces of terror.''

He also appeared to reach out to hundreds of thousands of minority ethnic Tamils who have sought political asylum in the West.

``At this moment I urge all Sri Lankans from all communities who fled the country because of the war to return to their motherland,'' Rajapaksa said.

Rajapaksa's address came alongside U.N. reports that cluster bombs had hit the north's largest functioning hospital. Fifteen U.N. staffers and 81 family members are trapped in the Puthukkudiyiruppu area, where the hospital was hit, U.N. spokesman Gordon Weiss said.

``We hold the gravest fears for the safety of our staff and their families,'' Weiss told reporters. The International Committee of the Red Cross (ICRC) reported that the hospital has been hit five times in the past few days, including a strike on the pediatric ward, leaving at least 12 civilians dead and 30 wounded.

After a harrowing night of intense shelling, the patients and medical staff have been evacuated, said Sarasi Wijeratne, an ICRC information officer in the country's capital of Colombo.

``The patients are out after shelling continued into the morning and hit the operating theater. Some patients were running out of the hospital because they were scared,'' Wijeratne said. ``Now we are requesting that the patients be allowed to be moved so there can be treatment and care for the sick and wounded.''

It was not clear who launched the cluster bombs, which spray dozens of ``bomblets,'' and are banned under the international Convention on Cluster Munitions. Sri Lanka - 's military spokesman, Brig. Udaya Nanayakkara, said that the government wasn't to blame.

``The U.N. is going all over the media saying there were cluster bombs. We know those aren't ours,'' he said. ``They are banned under international laws. We have been fighting this whole time and never used them. The Tigers may have gotten them through their sources.

``We know the exact location of the hospital. We just don't fire indiscriminately,'' he said in an interview, with a heavily marked map of the tear-dropped shaped island behind him. He blamed the rebels, saying they were using Tamils as human shields.

Representatives of the rebel group have not been available for comment.

The attacks on the hospital have become a symbol of the human cost of ending the 25-year civil war between the Tamil rebels and the largely Sinhalese government. An estimated 70,000 people have died in the conflict. Aid agencies and the U.N. say there are about 250,000 civilians trapped along with the Tamil rebels, who have been fighting to create a separate Tamil homeland in the country's northern and eastern provinces. The government disputes the figure, saying it is far lower.

Aid workers' reports of casualties are impossible to verify independently because the government has banned journalists from going there, except on several recent carefully guided tours. During a surge in fighting in recent months, the Tigers had been driven from their longtime strongholds and de facto separate state centered around the northern regions of Kilinochchi, Elephant Pass and Mullaitivu. They now control a jungle area of less than 120 square miles along the Indian Ocean island's northeastern coast. Fighting has been concentrated in a much smaller area of around 30 square miles, according to the Sri Lankan military.

In the first international acknowledgement that the rebels might be near to defeat, the United States, Japan, the European Union and Norway -- Sri Lanka - 's international quartet of top donors -- said the Tigers and the government ``should recognize that further loss of life, of civilians and combatants, will serve no cause.''

Secretary of State Hillary Rodham Clinton and U.K. Foreign Secretary David Miliband also issued a statement pushing for a truce so that humanitarian aid could be allowed in. Long term, they called for a political solution to the issue of Tamil separatism. The United States has labeled the Tamil Tigers, who are known for their early use of suicide bombers, as a terrorist group.

In the seaside capital, there was hope that the war would finally be over, but also worries that new tensions would surface. More than 10,000 police officers guarded the city to mark the country's independence from colonial power. Throughout the morning, roads were closed and families stayed home watching the parade and patriotic television footage, which showed Sri Lankan troops giving out water to suffering civilians and carrying the wounded out of monsoon-drenched rural fields.

Bright yellow national flags, showing a roaring lion, were perched atop Buddhist and Hindu temples, homes, on rattling rickshaw taxis and above shacks selling bananas and mangos. Amid a stage festooned with balloons and a buffet dinner, an updated national theme song was released with lyrics stressing a united country. Published: Wed Feb 4 16:14:35 EST 2009

The fighting is concentrated in a sliver of land of about 30 square miles (85 square kilometers) along the northeast coast of this island nation off the tip of India. After a monthslong military push into the northern jungles and towns, the rebels appear on the verge of defeat after a 25-year war for a separate homeland for the country's minority Tamils. More than 70,000 people have been killed in the fighting.

After days of artillery barrages that killed at least 12 people at the Puthukkudiyiruppu hospital, the Red Cross said it evacuated the staff and wounded. The Red Cross is one of the few aid groups allowed in the war zone.

``The last remaining medical facility inside the Vanni pocket (war zone) has been effectively closed,'' U.N. spokesman Gordon Weiss said.

He told The Associated Press that 15 local U.N. staffers and 81 family members who were trapped near the hospital fled Wednesday after the area was pounded for more than 16 hours by artillery fire, including cluster munitions. The Tamil Tigers tried to take U.N. vehicles during the evacuation but backed off when the staff resisted, Weiss said.

The Tamil Tigers were not available for comment because most communication to the war zone has been cut.

Military spokesman Brig. Udaya Nanayakkara denied firing cluster bombs, saying ``We don't have the facility to fire cluster munitions. We don't have these weapons.'' Weiss said the U.N. accepted the government's assurance that they did not have the weapons.

Weiss said the hospital area was also hit over the past day by airstrikes, likely launched by the government because the Tamil Tigers have no air capability left.

He said 52 civilians were killed and 80 wounded in fighting Tuesday inside and outside a government-designated safe zone, an area of rebel territory that it had pledged not to strike.

Dr. Thurairajah Varatharajah, the top health official in the war zone, estimated last week that more than 300 civilians had been killed in the recent fighting, something the government denied. Varatharajah has not updated his estimate.

As the fighting seemed to near its end, Sri Lanka - held a lavish parade to mark its independence from Britain 61 years ago.

Addressing the gathering, Rajapaksa said government troops have defeated the ``cowardly forces of terror that had wrapped our entire nation in fear,'' despite the sophisticated Tamil Tiger military machine and its suicide squad.

The rebels complain that ethnic Tamils have suffered years of marginalization at the hands of successive governments controlled by the Sinhalese majority.

More than 4,000 people in Germany protested Sri Lanka - 's offensive Wednesday, chanting slogans like ``stop the genocide'' while marching through downtown Berlin. They appealed to the German government to bring pressure on Sri Lanka - to end the fighting.

Associated Press writers Krishan Francis and Vijay Joshi in Colombo contributed to this report. Published: Wed Feb 4 13:52:00 EST 2009

The Tamil Tigers were declared a terrorist organization by the U.S. in 1997 and by Canada in 2006.

``Canada calls for the Government of Sri Lanka - and the Liberation Tigers of Tamil Eelam (LTTE) to declare and honor an immediate cease-fire to allow full, safe and unhindered access; the evacuation of the sick and wounded; and the delivery of much-needed humanitarian assistance to civilians,'' Cannon said.

Canada endorsed peace proposals by the members of the Tokyo Donor Conference on Reconstruction and Development of Sri Lanka - , of which Norway, Japan, the United States and the European Union are part.

The fighting in Sri Lanka - is concentrated in an area where an estimated 250,000 Tamil civilians are trapped along with the last of the Tamil Tigers, who appear on the verge of defeat after a 25-year war for a separate homeland for the country's minority Tamils. About 70,000 people have been killed over that period.

Cannon called on the Tigers to discuss with the government of Sri Lanka - the terms for ending hostilities, including the including the renunciation of violence, the laying down of arms, and the acceptance of Sri Lanka - 's offer of amnesty, as the first step toward an inclusive political dialogue that can contribute to a lasting peace.

Thousands of Canadian Tamils formed a human chain through Toronto's downtown last Friday to protest the Sri Lankan government offensive. Published: Wed Feb 4 21:06:02 EST 2009