Since the November election of hard-line President Mahinda Rajapakse, the government-controlled port city of Trincomalee has reprised its role as the primary flashpoint in Sri Lanka’s 25-year civil conflict. If Sri Lanka staggers back into open war, it is probably here that it will begin.

Barely a week has passed in the last six months without a fatal clash occurring in this heavily militarised region, with government forces regularly fighting separatist Tamil Tiger rebels. In the country as a whole, almost 1,000 have died in the same period. Over the last nine days though, casualties have increased markedly and both sides are getting worried – although both seem equally powerless to step back.

A battle for control of water supplies, begun last week, has expanded throughout the region - leaving over 120 dead on both sides. In perhaps the most worrying development since the 2002 ceasefire agreement, both forces are now openly launching incursions into the other’s territory - the Tamil Tigers claim to hold a previously government controlled town just outside Trincomalee.

This violence prompted the Nordic Sri Lankan Monitoring Mission (SLMM), mandated to monitor the ceasefire, to describe the situation as a "low intensity war".

The concern is that, as Tamil Tiger forces shell the Trincomalee naval base and government airstrikes pound Tiger positions, Sri Lanka’s ceasefire – always fragile – will finally, officially, crack.

The civil war began in 1983, when ethnic Tamils in the north attempted to cede a part of the country from the Sinhalese majority government. The resulting conflict ostensibly ended in 2002, leaving around 64,000 dead.

Since then the Tamil Tigers have run a de facto government from behind a line of control, with occasional violence punctuating an uneasy stand-off between the north and south.

The pretext for the latest clashes was a spat about water. Last month Tamil authorities accused the Sri Lankan government of reneging on its promise to provide them with water towers. In retaliation, Tigers claim, locals shut off the water supply from a reservoir which, although inside Tamil Tiger territory, supplied 60,000 villagers in government-controlled areas.

The government responded with four days of airstrikes. On Sunday they sent in ground troops across heavily-mined areas, insisting their’s was solely a humanitarian mission to restore the water supply. Humanitarian or not, it inflamed an already dangerously divided region.

In peace, Trincomalee would be a shining example for Sri Lanka’s ethnic diversity. Close to the rebel border, it has ethnic Sinhalese and Tamils in equal numbers, as well as a similar population of Muslims. It is one of the world’s largest natural harbours, but surrounded by breathtakingly beautiful sandy beaches. Tourism and industry should be booming.

However, Trincomalee has rarely been at peace.

Tamils may be fighting Sinhalese now, but Tamils have also been fighting their own. Since 2004, Tiger troops have been engaged in a power struggle with a breakaway group known as the Karuna Faction – whom many suspect are receiving funding and shelter from the government.

Add in a steady drip of Islamic violence and this is a city used to conflict. Some locals claim they can tell the perpetrator of a particular attack just by the weapon used – Muslim groups, apparently, prefer knives.

So it is unsurprising that the instability spread. On Tuesday four sailors were killed when Tamil Tigers shelled a naval vessel coming in to dock, today 10 civilians died in an artillery attack and yesterday up to 40 rebels died in an attack on an army barracks.

Tamil Tigers have taken up positions in Muttur, a Muslim town across the bay from Trincomalee, from where they are firing on government troops.

Yet hope just about remains. No side is prepared to back down, but equally no side is prepared to declare the ceasefire void. They know it is a war that cannot be won, that will benefit no one.

If Trincomalee continues in a state of virtual war then the whole country must inevitably follow. If Trincomalee pulls back though, if its different ethnicities manage to return to a frosty stand-off, then the country might limp along for a few more years.

If, however, the town's population heeds the advice of its poster campaigns and – yes – remembers to smile at one another, then maybe, just maybe, Sri Lanka can escape the fate that so many already consider a certainty.

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