A major economic crisis may encourage Sri Lanka to break an impasse in the Norwegian-backed peace process and enter talks with Tamil Tiger separatists, diplomatic sources here said Thursday.

Peace hopes were also raised when Norway's Erik Solheim arrived here Wednesday on his latest mission to try to bring Colombo and the separatist Liberation Tigers of Tamil Eelam (LTTE) to the negotiating table.

Solheim met with Sri Lanka's main opposition leader Ranil Wickremesinghe and was expected to hold talks with other key leaders, including President Chandrika

Kumaratunga.

Diplomatic sources noted Solheim's latets mission was taking place against the backdrop of Kumaratunga's remarks that there were "small, but positive" signals from the Tamil Tigers to enter a dialogue.

"The economic picture must be a compelling reason for the government to move to the negotiating table," a diplomatic source said.

"The Tigers too are having serious problems of manpower. That should encourage them too to talk."

Central Bank deputy governor, W. A. Wijewardena said Sri Lanka was facing the danger of not being able to secure its imports due to its poor foreign reserves.