The Sri Lankan navy has sunk a Tamil Tiger ship suspected of smuggling weapons. The clash came shortly before opposition parties staged a large rally in the capital, Colombo, to protest the government's handling of the peace process with Tamil rebels.
The clash took place about 300 kilometers off the island's northeastern coast. Officials said a navy patrol boat fired warning shots on an unnamed cargo vessel, after it did not respond to signals to stop.
The ship fired back, and four government sailors were injured in the gun battle. The cargo ship then caught fire and sank.
European peace monitors said the rebels confirmed one of their ships was involved in the clash. About eight or 10 people were on the boat when it sank. The monitors called the clash a "serious matter."
Last month, three Tamil Tigers blew up the boat they were on after Norwegian monitors caught them smuggling weapons. Hours after the confrontation at sea, tens of thousands of opposition supporters rallied in Colombo to protest the government's peace bid with the rebels.
Opposition parties accuse the government of making too many concessions to the rebels, and ignoring cease-fire violations by the Tamils. They say the peace process is paving the way for the country's division.
A political analyst at Colombo's Center for Policy Alternatives, Rohan Edresinghe, called the rally "a warning call to the government."
"The government will have to sort of get its act together on the peace process a little more effectively on two main counts. One is, it needs to do more to defend the peace process publicly. Secondly, there is a perception that the government has been a little too soft on the LTTE [Liberation Tigers of Tamil Eelam], with respect to some key issues like violations of human rights, etc.," Mr. Edresinghe said.
The main opposition party, the People's Alliance, joined with Marxists and hard-line nationalists to stage the protest. The People's Alliance is led by President Chandrika Kumaratunga, who has the power to sack the government.
The government and the rebels hold a sixth round of peace talks in Japan next week. The two sides signed a cease-fire agreement and opened talks last year to end the island's two decade ethnic conflict. The rebels have given up on demands for a separate homeland, and say they are prepared to accept autonomy in the Tamil-dominated north and the east.