Displaced ethnic Tamils at a government camp in Kiran, Sri Lanka, 21 Jan 2007

Sri Lankan military spokesman Prasad Samarasinghe says Tamil Tiger rebels who were forced from the eastern Vakarai region are near Batticaloa, following intense battles between the troops and militants.

The military said about 42,000 civilians, held against their will by rebels in Vakarai before the fighting, are now much safer.

"Now 95 percent of the civilians in eastern province, of the civilian population, is in the government controlled areas," he said.

Samarsinghe says the military is clearing mine fields in northern Batticaloa and rebuilding a bridge he says was demolished by the rebels, known as the Liberation Tigers of Tamil Eelam.

"Now these civilians can get back as soon as possible and the army is now facilitating these civilians to get back and resettle with the assistance of the government," added Samarsinghe.

Samarsinghe says the military found three rebel camps within 100 meters of the hospital in Vakarai, an area where thousands of civilians had gathered after they fled their homes in October. But reports that the hospital had been damaged in recent fighting were incorrect.

The International Committee of the Red Cross says it hopes to reach the area soon.

Recent clashes have not been confined to land. The military says the rebels, also known as LTTE, attacked a British civilian cargo ship Sunday, after it delivered food supplies to civilians in Jaffna, in the north.

"After unloading the foodstuffs, the ship was returning and about 20 LTTE boats came, with suicide boats, to attack the ship. And navy, with the help of air force and ground troops with artillery fire were able to stop the LTTE boats attacking the ship. But one LTTE suicide boat exploded closer to the ship and the ship got damaged, the hull got damaged, but the navy recovered the ship," he said.

Sri Lanka's military says 10 troops have been killed and 42 injured in the past few days of fighting, and that at least 370 rebels have been killed since October 2006.

Fighting between Tamil separatists and Sri Lanka's government has claimed more than 67,000 lives since 1983. A ceasefire was mediated by Norway in 2002, but it broke down completely late last year.

The rebel group is listed by the U.S. State Department as a terrorist organization.