Sri Lanka says Tigers defeated

COLOMBO (Reuters) - Sri Lankan President Mahinda Rajapaksa on Saturday said the Tamil Tigers had been militarily defeated as soldiers seized control of the entire coastline for the first time in a 25-year war.

Rajapaksa, on a visit to Jordan, said he would return to Sri Lanka on Sunday "as a leader of a nation that vanquished terrorism."

Rajapaksa spoke after troops took control of the Indian Ocean island nation's entire coast for the first time since war broke out in 1983, cutting off the Tigers' last hope of escape from a military advance aimed at crushing separatist resistance.

Intelligence reports indicated that Vellupillai Prabhakaran, founder-leader of the Liberation Tigers of Tamil Eelam (LTTE), and other leaders were surrounded by soldiers in barely a square km (half a sq mile) of land near the northeastern coast.

The LTTE's conventional defeat has been a foregone conclusion for months. The only question remaining has been the fate of tens of thousands of people the United Nations and others say the Tigers are holding in harm's way as human shields.

Explosions rocked the battlefield as the LTTE set off its ammo dumps, the military said.

"My government, with the total commitment of our armed forces, has in an unprecedented humanitarian operation finally defeated the LTTE militarily," Rajapaksa told a meeting of 11 developing nations in Jordan.

A presidential official who declined to be named said Rajapaksa's statement was not the official declaration of victory, which would come in a TV address after his return.

Nearly 11,900 people fled rebel areas on Saturday, bringing the total to more than 25,000 since Thursday, military spokesman Brigadier Udaya Nanayakkara said.

TIGERS WARNING

The LTTE said a conventional defeat would only result in a new phase of Asia's longest modern war.

"Colombo's approach, to finish the war in 48 hours through a carnage and bloodbath of civilians, will never resolve a conflict of decades," the pro-rebel website www.TamilNet.com quoted the LTTE's S. Pathmanathan as saying.

"On the contrary, it will only escalate the crisis to unforeseen heights."

Pathmanathan, believed by diplomats to be somewhere in southeast Asia, has for years been the Tigers' chief weapons procurer, and is wanted by Interpol.

The Tigers have answered early battlefield losses with suicide bombings in the capital, Colombo. Their widespread use of assassinations and suicide blasts has prompted the United States, European Union and India to class them as terrorists.

U.N. Secretary-General Ban Ki-moon's chief of staff, Vijay Nambiar, was due in Colombo to make a last-ditch attempt for a negotiated end to the war.

The Tigers this week again refused to surrender or to free civilians, while the government rejected calls to pause its assault to protect civilians.

Each side accuses the other of killing civilians, and diplomats say there is evidence both have done so. The U.N. rights chief on Friday said she backed an inquiry into potential war crimes and humanitarian violations by both sides.

British Prime Minister Gordon Brown called for an immediate end to fighting and said Sri Lanka "must understand that there will be consequences for its actions."

Nambiar's visit, U.N. and Western condemnation and U.S. threats to withhold a $1.9 billion International Monetary Fund (IMF) loan all appear to have come too late to stop a fight to the finish between uncompromising foes.

The Red Cross called the civilians' plight an "unimaginable humanitarian catastrophe" because of the lack of food, water and medical care in the battle zone, where the United Nations estimates 30,000-80,000 people are trapped.

"We have not eaten for weeks," a Tamil woman who escaped told Derana TV.

"Tell your leader to rescue all our children, all the Tamils. There are children without legs, some are dead on the streets. After seeing so many, I have lost interest in life."

ECONOMIC CHALLENGES

Many analysts expect the LTTE to return to its hit-and-run guerrilla roots with financing from the global Tamil diaspora, but the military says it is ready to face that threat.

The LTTE has vowed to attack economic targets.

That could complicate Rajapaksa's plans to revive Sri Lanka's $40 billion economy, reeling from falling revenues from garment and tea exports, a balance-of-payments deficit, a declining rupee, and depleted foreign exchange reserves.

Despite the U.S. threats, the IMF on Friday indicated it expected the loan to be worked out in a few weeks.

Prabhakaran began his fight for a separate state for Sri Lanka's minority Tamils in the early 1970s, and it erupted into full-scale civil war in 1983.

Tamils complain of marginalization at the hands of successive governments led by the Sinhalese majority, which came to power at independence in 1948 and took the favored position the Tamils had enjoyed under the British colonial government.