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Lanka troops in sea battle as LTTE-held towns fall

(Colombo confiscates Tigers' money

AFP, AP, Colombo
Sri Lanka s navy traded tire with a flotilla of ramil rebel boats off the island's northeastern coast yesterday, a day after ground troops captured three guerrilla-held towns, defence officials said.
I he navy's special boat squadron engaged the four boats of the Liberation Tigers of Tamil Eelam (LTTE) off Mullaitivu district and destroyed at least two of them, a navy spokesman said.
The sea battle came as the military pushed ahead with its multi-pronged offensive against the rebels' de facto state in the north.
The battle erupted in Nayaru Lagoon on Sri Lanka's northeast coast, just south of the rebel stronghold of Mullaitivu, when navy forces attacked seven lamil Tiger boats, the military said in astatement.
The navy sank two rebel boats and severely damaged a third, killing six rebel sailors, tire military said.
As the remaining rebel boats fled to shore to be hauled out of the water, attack helicopters pounded them with airstrikes, it said.
The military also launched airstrikes in other parts of the north, sending helicopters to attack a rebel gathering point in Kilinochchi district early Tuesday, the military said.
It was not possible to contact rebel officials for comment because most communication lines with the north have been severed. Independent accounts are difficult to obtain from the battlefield because most journalists are barred from the war zone.
The sea battle came after the government said its forces had captured three strategic towns from the rebels.
The advances capped three days of psychologically important gains for government troops, who have been bat tling the rebels for more than 35 years, army chief Sarath Fonsekasaid.
Security forces entered the town of Mankulam, about 30 kilometres (20 miles) south of the Tamil Tiger political capital of Kilinochchi, after intense battles with the rebels, Fonseka said.
Meanwhile, Sri Lanka's central bank said Tuesday it had confiscated money held by a front organisation of the lamil Tigers under anti-terror laws.
The government had already frozen bank accounts of The lamil Rehabilitation Organisation (TRO) in August 2006 charging that money raised for humanitarian aid was being diverted to the rebel Liberation ligers of Tamil Eelarn (LTTE).