Sri Lanka kills 30 rebels as fighting grinds on

COLOMBO (Reuters) - Sri Lankan troops have killed at least 30 Tamil Tiger rebels including an area leader in fresh fighting in the island's north, the military said on Friday.

Thursday's clashes along a "border" that separates government from rebel territory in the far north was the latest violence in a 25-year civil war analysts say neither side is winning.

"Navy troops attacked a group of terrorists in Peraru in Trincomalee (in the northeast). A search found two LTTE dead bodies and one of them is an area leader," a military spokesman said, asking not to be named in line with policy.

Troops also killed 28 Tiger rebels and wounded 24 others in clashes in the northern districts of Jaffna, Vavuniya and Mannar, he added, saying one soldier was killed and eight were wounded.

The Liberation Tigers of Tamil Eelam (LTTE), who are fighting for a separate state in the Indian Ocean island's north and east, were not immediately available for comment.

There was no independent confirmation of what had happened or how many people were killed, and analysts say the foes exaggerate enemy casualty figures and play down their own.

Fighting between the military and the rebels has intensified since the government scrapped a six-year ceasefire pact last month. It said the rebels were using the truce to re-arm.

The military has captured large swathes of territory from the Tigers in the east of the country in recent months, vastly outnumbers them, and is now seeking to overrun their northern stronghold.

But observers see no clear winner on the horizon. The violence has forced some businesses to put investment plans on hold and helped push the stock market down around 7 percent in 2007 and another 3 percent so far this year.

Bus bombings and suicide attacks blamed on the Tigers are increasingly focused on civilians, as in earlier stages of the war. Experts say are targeted because they are less well protected and so easier prey.

Thousands of people have been reported killed in recent months. The conflict that has killed an estimated 70,000 people since 1983.

The bulk of fighting has been in the far north in recent months, well off the tourist track. But attacks are increasingly scattered, prompting some foreign governments to issue travel advisories.

Officials say tourist arrivals, which fell 11.7 percent in 2007 from a year earlier with revenues down even more, could suffer further if attacks continue to spread.

(Reporting by Ranga Sirilal; Editing by Simon Gardner and Katie Nguyen)