Sri Lanka brushes off criticism and guns for Tigers

COLOMBO (Reuters) - Sri Lankan troops broke through Tamil Tiger defences on Tuesday and the government brushed off Western criticism of civilian deaths as a rebel-orchestrated bid for a last-minute reprieve.

The rebels, cornered in a coastal strip where they have held tens of thousands of civilians, for a third day accused the military of shelling the 2.5 square km (1 sq mile) no-fire zone, this time killing 45 people.

Fury, blame and recriminations from both sides have flared in the closing days of Asia's longest modern war, after the Liberation Tigers of Tamil Eelam (LTTE) said hundreds of civilians were killed in artillery barrages starting on Sunday.

The allegations are impossible to verify, since the war zone is sealed off to most outsiders and those inside cannot be considered fully independent.

The military on Tuesday said soldiers and special forces troops had advanced across a narrow causeway into the south of the no-fire zone, leaving the Tigers surrounded on all sides and opening another escape route for civilians.

"When forces move forward, civilians have the pathway and are confident to move out," defence spokesman Keheliya Rambukwella told reporters.

More than 116,000 civilians fled in the days after troops broke a rebel barricade, which the government said refuted the LTTE assertion that people had chosen to stay and be part of its goal of building a separate nation for the Tamil minority.

LTTE peace secretariat head Seevaratnam Puleedevan told Reuters the army had attacked a makeshift hospital on Tuesday, killing 45 people.

Sri Lanka denied responsibility for the reported attacks, accusing the rebels of generating "shock and outrage at supposed atrocities" by forcing government-employed doctors in the war zone to give out false death tolls.

"Giving credence and acceptance to this LTTE-inspired piece of 'news', would wittingly or unwittingly aid the terrorist organisation to save itself at the hour of its impending demise," a government statement said.

IMF THREATS

British Foreign Minister David Miliband and his French counterpart, Bernard Kouchner, criticised the Sri Lanka on Monday at the United Nations, saying it had violated its pledge to protect civilians by not using heavy weapons in what appears to be the endgame of its 25-year civil war.

The two said Sri Lanka's requested $1.9 billion (1.2 billion pound) International Monetary Fund (IMF) loan and an EU trade preference that helps the Indian Ocean island nation's crucial garment sector should be reviewed in light of the attacks.

China, Japan, Vietnam and Russia on Monday stopped Kouchner and Miliband from getting Sri Lanka onto the Security Council agenda, diplomats said.

Sri Lanka, in a political reversal, sought the IMF loan in March to help meet a balance of payments deficit, support post-war development and boost foreign exchange reserves hovering around six weeks of import cover.

The global financial crisis has hit dollar inflows from Sri Lanka's tea, garment and diaspora employment sectors, while it struggles with rising import costs and a falling rupee currency.

However, the United Nations Security Council has said Sri Lanka should not be punished with the IMF loan, and the EU trade preference is under investigation through next year.

(Additional reporting by Shihar Aneez; Editing by Alex Richardson)