President Chandrika Kumara-tunga and Prime Minister Ranil Wickremesinghe met for 90 minutes at her official residence in their second meeting since a political power struggle erupted two weeks ago.

"A committee of officials was appointed to work out the details of future working arrangements under which the president and the prime minister could work together on these important national issues," the statement said.

It made no direct reference to the peace process involving Tamil Tiger rebels which Norwegian mediators put on hold last week saying they needed "clarity" as to who was in charge in Colombo.

"The President has followed the cabinet reshuffle with a call for a government of National Reconstruction and Reconciliation to take forward the peace process with a strong degree of consensus," a statement from her office said.

The bid to end 20-years of war, has been in turmoil since Kumara-tunga sacked the defence, interior and media ministers and suspended parliament early in November. She accused the Prime Minister of conceding too much to the rebels.

Wickremesinghe has demanded that the President, who has wide constitutional powers over the army and heads the cabinet, hand back the portfolios or take over the peace process.

Neither side gave any ground in a first meeting last week.

"The second meeting has been arranged for Tuesday with them and their advisers," said Janadasa Peiris, director general of the president's Media Unit.

Parliament is due to resume work on Wednesday with the presentation of the 2004 budget, which was to have taken place last week. The presidential statement said it hoped a national government "would act as a catalyst to renewing the peace process".

Cabinet spokesman G L Peiris repeated on Monday Wickrem-esinghe's rejection of a national government, but said the Prime Minister was willing to form a consensus among political parties -- including the president's -- on issues related to the peace process.

Wickremesinghe's party has a slim majority in parliament.

The cabinet spokesman provided no details on how such a consensus would be reached.

Both sides are under pressure to compromise.

Norway , which brokered a February 2002 truce that has given the island its best chance yet to end a war that has killed 64,000, said it would suspend its role until their differences were resolved.