The rebel group said it had achieved its objective. The military says the town, in Trincomalee district, is now back in government hands.At least 20 people have been killed and thousands have fled the worst violence between the two sides in four years. But the reason for the dispute is not yet resolved, a BBC correspondent says. The Maavilaru sluice gate, which the Tigers are accused of closing to highlight Tamil grievances, has not yet been opened.

The government said it launched the offensive to save thousands of farmers who rely on the Maavilaru canal for vital water supplies. Muttur has been cut off for several days as both sides traded mortar and artillery fire. Aid agencies complained of being unable to reach civilians because they had failed to get security guarantees. More than 20,000 people are believed to have left the mainly Muslim town on Friday seeking safety in neighbouring towns.

The military has accused the Tigers of killing 100 civilians during the exodus. There was no immediate reaction to the claim from the rebel group. A Tamil Tiger military spokesman, Irasaiah Ilanthiayan, told the pro-rebel TamilNet website that the fighters had returned to their own territory. "Our objective of the mission, with a defensive character, was accomplished and our forces returned to their positions," he said.

A Tigers source told Reuters news agency: "It was a limited operation, and we are doing this on humanitarian grounds." He added that the Tigers wanted people to return home. The call for residents to return was echoed by the Sri Lankan army. "We have the town totally under our control. We tell the people to come back and resume their normal lives," Major Nalin Jayatillaka, commanding officer for Muttur, said.

Norwegian envoy Jon Hanssen-Bauer is expected to meet rebel leaders on Sunday to discuss the crisis. He has already met senior government officials. Casualties are hard to verify but the army says at least 23 soldiers have been killed since the military launched its latest offensive. The rebels have lost 32 fighters, according to the statement on the TamilNet website. The International Committee of the Red Cross told the AFP news agency it was unable to verify claims of civilian casualties or massacres because it had not had access to the area.

Source: BBC