Residents in the far northern army-held Jaffna peninsula heard volleys of artillery shells before dawn, but said the intensity was far lower than in recent weeks -- the worst fighting since a 2002 ceasefire that now lies in tatters.

The military said the Air Force pounded suspected bases of the rebels' naval Sea Tiger wing in the eastern district of Batticaloa, and also raided rebel targets in the north.

The Liberation Tigers of Tamil Eelam (LTTE) and the government have agreed to meet for talks on October 28-30 after a six-month impasse. The government committed to the talks on Wednesday night, and says they will take place in Geneva.

The Tigers wanted to go Oslo and have not yet said whether they agree to go to Geneva.

The rebels have threatened to withdraw from the truce completely if attacks by the military continue, while the government says it reserves the right to retaliate if the Tigers attack security forces.

"Opportunities don't come often. Both sides will have to understand that," said defence spokesman and cabinet minister Keheliya Rambukwella. "Anything that threatens national security will be responded to."

Some analysts believe the time is not right for talks given the intensity of fighting, and fears the war could escalate.

Each side accuses the other of trying to rekindle a two-decade conflict that has killed more than 65,000 people since 1983, and Nordic truce monitors see little will from either side to halt the violence.