"Suicide bombers drove a truck packed with explosives into the area where there were about 15 buses," a police official in nearby Sigiriya town told Agence France-Presse (AFP) by telephone.

The bombing occurred about 170 kilometers (105 miles) northeast of Colombo at a transit point for security personnel coming to and from the front line of the drawn-out conflict in the restive northeastern district of Trincomalee.

Doctors said that 98 bodies were at the nearby Dambulla hospital while four more people died while being taken by road to a hospital in the major town of Kurunegala.

The Defense Ministry said there were 340 sailors waiting for transport when the blast occurred.

There was no immediate reaction from the Tamil Tigers, who last week fiercely resisted a major military onslaught, killing at least 133 soldiers and wounding 500 in two hours of fighting, according to government figures.

The bombing was the worst against security forces since the Liberation Tigers of Tamil Eelam (LTTE) drove an explosive-laden truck into an army camp on the Jaffna peninsula in July 1987, killing 40 troops in the rebels' first-ever suicide attack.

Until Monday's attack the worst suicide bombing was against the central bank building in Colombo, killing 91 and wounding 1,400.

More than 60,000 people have been killed in the three-decades-old conflict for a Tamil homeland on the Sinhalese-majority island.

Shattered Peace

Sri Lanka's government, scheduled to hold peace talks with the LTTE in Switzerland later this month, said the "barbaric" act meant the rebels were not interested in negotiations.

"This barbaric attack on unarmed sailors shows that the Tigers are not worried about international opinion," said government defense spokesman Keheliya Rambukwella, who is also the minister of policy planning.

"We are keen on negotiations, but the Tigers are not."

Monday's blast came as Sri Lanka's key international backers moved to salvage a 2002 truce and arrange talks later this month.

Top Japanese envoy Yasushi Akashi Monday met with President Mahinda Rajapakse and former chief peace negotiator Nimal Siripala de Silva.

He was to hold talks with other Colombo-based political parties later in the day, government officials said.

Akashi was also expected to meet top LTTE leaders during his six-day visit, although a sit-down exchange with the Tiger's reclusive commander Velupillai Prabhakaran was unlikely, Japanese officials said.

Norway, the main peace broker in Sri Lanka, was planning to send special envoy Jon Hanssen-Bauer on Tuesday, October 17, to work out details for the October 28-29 talks in Switzerland.

The Tigers have said they will confirm whether they are participating in the talks when they meet Hanssen-Bauer in the rebel-held town of Kilinochchi on Thursday.

US Assistant Secretary of State Richard Boucher was also expected to meet Thursday with government ministers and civil leaders.

In a sign of the international community's growing frustration over the continued fighting, Germany, Sri Lanka's second-largest donor behind Japan, has frozen more than 38 million euros (47.5 million US dollars) in aid projects, local media reported.