The United Nations has called for a halt in hostilities in Sri Lanka as thousands fled their homes in the north east of the country after the military launched air and artillery strikes on Tamil Tiger rebels.

Sri Lanka’s military began attacking the Tamil areas a day after a deadly suicide bombing on its headquarters in Colombo, which killed eight people, injured the Army chief and left the country’s uneasy ceasefire teetering.

This afternoon government officials were reporting tens of thousands of displaced people as the Norwegian peace envoy Erik Solheim tried to salvage the peace process, which was supposed to end three decades of ethnic bloodshed.

"We are working with the parties on an hour-to-hour basis to do whatever possible to bring them back to the negotiating table in Geneva as soon as possible and to put a stop to this violence," Mr Solheim said.

Amin Awad, head of the UN High Commissioner for Refugees (UNHCR) office in Sri Lanka, said that until aid agencies got access to the north-east it would be hard to say exactly how many had fled. "We have not yet had access to the area," he said. "We want access and have called for a halt in hostilities."

Brigadier Prasad Samarasinghe, a military spokesman, said that the new strikes came after the Liberation Tigers of Tamil Eelam (LTTE) fired on naval patrol craft off the eastern port of Trincomalee for a second day.

Lieutenant General Sarath Fonseka, the recently appointed chief of staff, was seriously injured in yesterday's assassination attempt, which killed his bodyguards and other soldiers.

The Government vowed to retaliate against any rebel attack. "There will be co-ordinated retaliation by the armed forces if the LTTE continues to attack," Keheliya Rambukwella, a spokesman, told a news conference.

"We are taking maximum efforts to strengthen national security," he said. The Tamils have warned of retaliation if strikes continue and have asked if Colombo has declared war.

This suicide bombing yesterday was the first in the Sri Lankan capital since July 2004, and the most serious blamed on the Tamil Tigers since they signed a truce with the Government in 2002.

Last week, the rebels backed out of peace talks that had been scheduled to start this week in Geneva, citing attacks on Tamil civilians and other disputes with the Government.

President Mahinda Rajapakse that said he did not want a return to conflict but would not be cowed by bomb attacks. "I emphasise and caution that one should avoid mistaking our desire for peace and our responsibility to achieve it as a Government, as weakness," he said in a televised address following Tuesday's suicide bombing.

A rebel official, S. Elilan, said that many more people could be buried in the rubble of damaged homes and buildings. "There are many people urgently needing medical attention but we can’t transport them because the roads are closed," he said.

Some 3,000 families have been displaced from their homes following the military attack, he said.

However, Ulf Henricsson, the Swedish head of the Nordic ceasefire monitoring team, said that despite the hostilities, Sri Lanka’s frail four-year-old truce is still valid.

"Certainly, we still have a valid ceasefire, no one has abrogated it, but it is on paper, what is going on is a serious violation of the agreement," he told the Associated Press.

Escalating violence in the north and east of the country over the past three weeks has targeted Sri Lanka's security forces on a regular basis. About 100 people have died, some 70 of them soldiers.

The rebels have also denied being behind recent bomb attacks, although police say that the explosion at the army headquarters in Colombo bears all the hallmarks of the Tigers. A woman who made herself appear heavily pregnant to conceal the explosives is believed to have carried out the attack.

A military analyst said if the Government’s military operation expands and results in substantial rebel casualties, Sri Lanka will face the prospect of a return to full-scale warfare.

"If the limited operation is limited to certain areas to frighten the LTTE and to keep them away, it might not escalate," retired Air Marshal Harry Goonetilleke said.

"But if these operations are enlarged and kill a substantial number of rebel cadres or their sympathisers, then I think it will lead to full scale hostilities."

But Charu Lata Hogg, an associate fellow at Chatham House in London, who has worked as a journalist in Sri Lanka, said that while the escalation of violence started soon after the tsunami and there were two or three killings a day by April, neither side could afford full-scale military warfare.

"Technically the ceasefire still holds, but 100 people killed in one month is not a condition of peace," she told Times Online.

"Whether full scale warfare will break out or whether either side has the capacity to call of the ceasefire is a totally different question.

"Neither side wants to do it because of international pressure."

Efforts are continuing to persuade the rebels to return to peace talks in Switzerland.

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