The defence ministry said forces were moving towards Mullaitivu, the jungle district along the northeastern seaboard, where the Tigers are known to have their main military facilities.

On Friday, after months of intense fighting, the military finally captured Kilinochchi, where the Liberation Tigers of Tamil Eelam (LTTE) had gathered all the political trappings of a mini-state.

Military officials said the fall of Kilinochchi had cleared the way for security forces to re-establish control over a vital highway linking the northern Jaffna peninsula with the rest of the country.

Jaffna, which has a population of nearly half a million people and a considerable military presence, used to be supplied by air and sea because the Tigers controlled the land route.

The defence ministry said the military was also moving to dislodge rebels dug in at the entrance to the peninsula.

President Mahinda Rajapakse called the army's capture of Kilinochchi an 'unparalleled victory' for the entire nation and urged the rebels to lay down their arms and end their decades-old struggle for a separate homeland.

Street celebrations took place in the capital Colombo and elsewhere as news of the town's capture broke.

But just hours later, a suspected Tiger suicide bomber attacked an air force base in the capital Colombo, killing at least two airmen and injuring 36 others.

The Tigers admitted losing Kilinochchi, but argued that the town had been abandoned rather than captured.

'The Sri Lanka army has entered a virtual ghost town as the whole civilian infrastructure as well as the centre of the LTTE had shifted further northeast,' the Tigers said through the pro-rebel Tamilnet website.

While losing Kilinochchi is a major setback, the Tigers have shown in the past that they have the ability to rebound.

Barely six months after government troops captured the northern Jaffna peninsula in 1995, the Tigers overran a military base in Mullaittivu, killing more than 1,200 soldiers.

The guerrillas also reversed military gains of 19 months in a matter of five days in November 1999, going on to dislodge the military from their Elephant Pass base at the entrance to Jaffna.

In his annual speech in November, LTTE supremo Velupillai Prabhakaran vowed to defend his territory and suggested that the rebels would revert to guerrilla-style, hit-and-run attacks as their area shrank.

The Tigers have been labelled a terrorist group by the United States, the European Union and neighbouring India, but had the backing of the international community when Oslo-backed peace talks got under way in 2002.

The peace process virtually ended when the government formally pulled out of a moribund truce in January 2008.

The brutal Sri Lankan conflict over the Tigers' demand for a separate Tamil homeland has claimed tens of thousands of lives since 1972. -- AFP