The government said it was firmly committed to wiping out "terrorism" and ruled out a demand from a Tamil Tiger proxy for a ceasefire.

"We have taken a policy decision to completely root out terrorism," defence spokesman Keheliya Rambukwella told reporters here. "There will be no ceasefire with the LTTE (Liberation Tigers of Tamil Eelam)."

A pro-rebel website, Tamilnet.com quoted rebel radio as saying that at least 50 civilians had been killed and 70 wounded in air attacks on a village in the district of Mullaittivu.

Government military spokesman Brigadier Udaya Nanayakka said the Tamilnet report was a "fabrication."

"We have carried out attacks against resisting points of the Tigers and not in areas where there are civilians," he said.

Independent verification of charges and counter-claims is not possible as the authorities have severely restricted access to the region by relief agencies, diplomats and independent journalists.

There was no immediate comment from the International Committee of the Red Cross (ICRC) which has a limited presence in the area. However, the ICRC said earlier this month that "hundreds" of civilians had been killed in crossfire.

The latest truce appeal from the Tamil National Alliance echoed calls from Sri Lanka's key financial backers, including the United States, the European Union and Japan, for a "no-fire period" to let non-combatants out of harm's way.

A pro-government Tamil legislator, V. Anandasangari, said on Tuesday that 288 civilians had been killed during one week this month while nearly 800 were wounded in crossfire in the shrinking territory still under rebel control.

Meanwhile, Sri Lanka announced it was opening its doors to the UN's top envoy for humanitarian affairs, John Holmes, who is due in Colombo on Thursday to assess relief operations.

The visit comes after UN-appointed experts expressed concern earlier this month over "rapidly deteriorating conditions" and the "significant number of civilian casualties."

The latest fighting has provoked a strong reaction in neighbouring India, where 62 million people in the state of Tamil Nadu share close cultural and religious links with the ethnic Tamil minority in Sri Lanka.

The Indian parliament was in uproar Wednesday when External Affairs Minister Pranab Mukherjee accused the Tigers of causing "much damage" to the wider Tamil community.

Indian Tamils have been staging protests condemning Sri Lanka's military offensive with at least two men burning themselves to death this month. They have also urged New Delhi to broker a ceasefire on the island.

In other developments, Australia, home to a sizeable number of the diaspora, said it was giving 2.55 million US dollars to the ICRC to help the displaced.

"Australia is committed to doing what we can, in partnership with the government, the ICRC, UN agencies and other humanitarian bodies, to provide relief for this vulnerable population," said Kathy Klugman, the country's top envoy here.

Sri Lankan troops are on the verge of crushing the LTTE and ending their 37-year campaign for an independent Tamil homeland after pushing the rebels back into a small stretch of coastal jungle -- less than 100 square kilometres (38 square miles) in size -- in the island's northeast.

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