Government troops captured a strategic village held by Tamil separatist rebels as government forces continued their offensive to retake all of northern Sri Lanka, a military spokesman said Thursday.
The capture of the village in Akkarayankulam, 360 kilometres north of Colombo, came after nearly three months of fighting in the area, reported dpa.
The military released pictures of the captured area and said it was continuing its operations there.
The reported capture came as the government unveiled next year's budget, in which 1.6 billion dollars, or nearly one-fifth of expenditures, were earmarked for defence.
President Mahinda Rajapaksa, who is also finance minister, presented the budget in Parliament Thursday, saying he was renewing his invitation to the Liberation Tigers of Tamil Eelam, or LTTE, to return to the political mainstream in exchange for laying down their arms.
"If the LTTE does not lay down weapons, we will have no option but to continue our military operation and recapture the north," Rajapaksa said.
He pledged to conduct local elections in the north after recapturing it.
The military has said it hopes to recapture rebel-held areas in the north before the end of the year, but in recent weeks, the movements of the military has been slowed by heavy rains.
The military launched its offensive against the rebels in mid-2006 and since then has captured all the rebel-held areas in eastern Sri Lanka and some in the north. Rebels are now confined to two districts in the north.
During the offensive, more than 12,000 rebels and 2,500 soldiers and police officers have been killed, according to military figures.