Security forces marched into the town on Monday evening and on Tuesday morning were 'hunting for remaining Tigers', the ministry said.

'Domination of the well-known Mallavi town... marked one more decisive and impressive phase of the 'war for peace,' the ministry said, referring to its drive to take the Tiger political capital of Kilinochchi, further north.

The fall of Mallavi came as a total of 33 Tamil Tiger rebels and four government soldiers were killed in fighting across the north of the island, the ministry said.

It said 49 guerrillas and 11 soldiers were also wounded in the fighting on Monday.

The capture of Mallavi, where the Tigers had medical facilities, would be a psychological blow to the guerrillas as it is regarded the birth place of Tiger supremo Velupillai Prabhakaran's wife, defence officials said.

The Sri Lanka government pulled out of a Norwegian-brokered ceasefire with the rebels in January, and are engaged in a massive offensive aimed at dismantling the rebels' northern mini-state.

The defence ministry said security forces raised the national flag at Mallavi to the 'thundering applause' of troops.

The military also released pictures of the Mallavi hospital and other town landmarks now under military control.

There was no immediate word from the Tigers about the military announcement, but the pro-rebel Tamilnet.com website said they had offered stiff resistance on another front along the north-western sea board.

Tamilnet said fighting was reported near Mallavi, but gave no further details.

According to Sri Lankan authorities, government forces are now just 12 kilometres outside of Kilinochchi, the Tamil Tigers' main administrative base which is situated 330 kilometres north of the capital Colombo.

The Tigers have tacitly admitted losing ground - but in the past they have surrendered territory in the past only to strike back in devastating counter-attacks. -- AFP