Troops took control Wednesday of the A-5 road linking the town of Chenkaladi and Badulla in the central part of the island, defence ministry spokesman Prasad Samarasinghe said.

"Only about 140 square kilometres (54 square miles) of jungle land in the Thoppigala area still remain under LTTE (Liberation Tigers of Tamil Eelam) control and we believe around 300 to 350 rebels are in the jungles," Samarasinghe said.

The latest military advance, which began late February, has left nine soldiers and 184 Tiger rebels dead, he said.

Suspected Tamil Tiger rebels shot dead seven villagers of the majority Sinhalese community in northern Sri Lanka on Thursday, police said.

Gunmen from the Liberation Tigers of Tamil Eelam (LTTE) carried out the massacre in the Avarantalawa village in the district of Vavuniya where heavy fighting raged between troops and Tamil Tigers, police said.

Six women and a man were shot dead by the gunmen who escaped before constables reached the area, a police official said from Vavuniya, 260km north of here.

Military action to wrestle the eastern region from the Tigers began last July when the rebels shut an irrigation canal and blocked water to around 15,000 residents in a farming village.

"The Tigers have lost 1,175 cadres, we lost 98 security forces personnel, while two other government soldiers still remain missing (since July)," he said adding around 138,000 people had been displaced since.

Elsewhere in the north, fighting between security forces and Tiger rebels continued for a third straight day across a front line at Omanthai, the main crossing point between government and Tiger-held territory, officials said.

The clashes erupted when rebels fired mortars at military positions late Tuesday.

There were no details of any military casualties or any immediate word from the LTTE.

The military said the rebels were shelling government positions to obstruct the transport of supplies across the frontline.

Residents in the northern district of Vavuniya said three people were killed late Tuesday when government troops opened fire, accusing them of being suspected Tamil Tigers. However, residents later identified them as civilians.