Govt gained further territory in north as forces neared de facto LTTE capital Killinochchi. Tens of thousands more displaced, with tight restrictions on humanitarian aid causing severe hardships. Govt won provincial council elections in North-Central and Sabaragamuwa provinces after campaign marred by assaults, shootings and widespread intimidation of opposition. After 5 months detention without charge, Tamil journalist J.S. Tissanayagam accused of publishing allegedly terrorism-supporting magazine. 44 injured in Colombo bombing 30 Aug.

Sri Lankan Army captured LTTE coastal base at Vidattaltivu 15 July, believed to be major logistics centre and port of entry for arms smuggled from India. Humanitarian situation in LTTE-controlled north worsened; tens of thousands newly displaced without adequate shelter, supplies. Army chief cited saying insurgency could last “forever”, despite earlier predictions of conventional defeat. Tigers offered limited ceasefire during SAARC summit 26 Jul-4 Aug, but govt dismissed. TMVP leader Karuna released from British jail and returned to Sri Lanka to recommence political work.

Heavy fighting continued in north, with govt forces gaining new territory on Mannar, Vavuniya, Weli Oya fronts. 12 policemen killed in 16 June Vavuniya suicide bombing, while twin bus bombings 6 June, in Kandy and Colombo, killed some 20 and injured roughly 100. Disappearances and political killings – mostly of young Tamil men – on rise. Italian police reported arrest of 30 alleged members of LTTE for extortion, claimed dismantlement of Tigers’ fundraising network in Italy.

First elections in 2 decades in Eastern provinces held 10 May; ruling UPFA won 20 of 37 seats, but observers said poll marred by fraud and voter intimidation. Head of armed LTTE-splinter group, TMVP, Chandrakanthan named Eastern Province Chief Minister, despite protests from Muslim politicians post had been promised to a Muslim. Tensions between Muslims and Tamils turned violent after 22 May assassination of local TMVP leaders in Muslim town Kattankudy. TMVP blamed for retaliatory murder and abductions. Heavy govt-LTTE fighting continued throughout month; hundreds reportedly killed, mainly rebels, in northern clashes, as govt made some gains in territory. Suspected LTTE bombings continued; 11 civilians killed in Ampara blast day before elections, at least 9 in Colombo train blast 26 May.

150-200 govt soldiers reported killed, hundreds more wounded in fierce 23 Apr battle, as govt sought to breach LTTE forward defence lines at Muhamalai. Tigers admit 25 fighters dead, govt says more than 100. Army regained control of important Catholic Church and pilgrimage site in northern town of Madhu after months of fighting. Tigers, army each blamed other for blast that killed activist priest in LTTE-held Wanni region. Highways minister, 9 others killed in likely LTTE suicide explosion in Gampaha 6 Apr. 25 Apr bus bombing, also blamed on Tigers, killed 26 in Colombo suburb. Campaigning began for key eastern provincial council elections due 10 May.

TMVP party, Tamil armed group nominally led by LTTE renegade Col. Karuna, won 70% of vote in 10 March local government elections in east, first to take place in more than a decade. Refusing to disarm and running in formal electoral alliance with government party, TMVP accused of intimidation, including forced recruitment of candidates; polls also marred by absence of candidates from main opposition parties, worried about security. In 16-18 March visit, EU troika raised “serious concerns” about reports of human rights abuses, said reconsidering trade preferences. Tamil National Alliance MP, K Sivanesan, killed 6 March in roadside attack on his car.

2 bombings on 4 Feb, 60th anniversary of country’s independence, came amid wave of attacks targeting civilians: 3 Feb suicide attack in Colombo train station killed 11, bus attack 2 Feb killed 18 in Dambulla. Red Cross said 13 Feb civilian casualties had reached “appalling levels”: 180 killed, nearly 270 injured since beginning of year. Meanwhile, army claimed heavy losses in intensified push against northern LTTE strongholds.

LTTE-government ceasefire formally ended 16 Jan; military operations intensified with heavy losses. Minister for nation building killed in mine attack 8 Jan near Colombo. 27 killed in 16 Jan ambush bus attack in south east blamed on Tigers, many shot while fleeing explosion; 17 killed in 29 Jan attack for which Tigers blamed army. SL’s biggest donor Japan said reviewing aid after ceasefire lapse. All Party Representative Committee, appointed by president in 2006, released interim devolution proposals 24 Jan calling for implementation of existing constitutional arrangements for provincial autonomy. Plan greeted with heavy scepticism; Colombo widely seen as intent on military solution.

Reports 2 January that government formally withdrawing from ceasefire with LTTE rebels. Prominent Tamil MP and critic of government, T Maheswaran, shot dead in Colombo Hindu temple 1 January. Earlier in month, President Rajapaksevowedtowipeoutterrorismbeforediscussingpolitical solution. Government gained new momentum after winning 14 December budget vote with backing of Sinhalese nationalist parties. Security forces rounded up thousands of Tamils following late November bomb attacks in Colombo; most released after public outcry. In continued fierce fighting, government forces won some new ground in north, claiming heavy LTTE losses. 16 killed in bus attack in Anuradhapura 6 December, widely attributed to LTTE. At least 4 killed in Colombo mine attack on military bus 2 January; LTTE denied involvement.

Government airstrike 2 November killed S.P. Thamilchelvan, principal LTTE interlocutor with government and foreign envoys; Colombo hailed as legitimate strike against terrorist group and promised more targeted attacks on LTTE leadership, but Tamil community angered. LTTE leader V. Prabhakaran’s annual Heroes Day speech 27 November denounced government’s “war of genocide”. 2 bombings in Colombo next day killed 17. Government airstrikes in LTTE areas continued, along with sporadic but at times heavy fighting along Forward Defence Lines in Jaffna, Mannar and Vavuniya. Political instability continued in the south, with government’s ability to pass budget by year end still in doubt.