COLOMBO (Reuters) - Sri Lankan soldiers battled on Tuesday inside the last town the Tamil Tiger separatists control, and the government said it had no plans for a truce amid U.N. and E.U. calls for a halt to fighting.

Soldiers from the 58th Division entered Puthukudiyiruppu township after heavy fighting. That is the last actual town the Liberation Tigers of Tamil Eelam (LTTE) still control; after that there are only a handful of small coastal villages left.

They are inside Puthukudiyiruppu and fighting to take control, defense spokesman Keheliya Rambukwella, also a minister, said.

On Monday, U.N. Secretary-General Ban Ki-Moon urged a suspension of fighting to allow tens of thousands of civilians to escape while the European Union urged an outright ceasefire and condemned the LTTE for forcibly keeping people in the war zone.

Both followed an LTTE offer of a ceasefire on Monday, in which it refused to surrender and urged the international community to push for the former. The government has long said the Tigers have a choice: surrender or be destroyed.

Rambukwella dubbed the LTTE ceasefire call hilarious in an interview with the state-run Daily News, and said the Tigers had repeatedly manufactured civilian crises to get a truce when they were close to defeat and needed time to rearm.

The LTTE has never been closer to a military defeat than it is now.


On Monday, Reuters was at the frontline just to the west of the Puthukudiyiruppu town center, where 58 Division commander, Brigadier Shavendra Silva, said: It's the last objective. Silva at the time said he was measuring the war in days, and not weeks.

His soldiers now have less than 6 km (4 miles) to go before they reach a 12-km long no-fire zone the army established on the Indian Ocean island's northeast coast.

It is there that he and other commanders expect a showdown with the LTTE, the final act in a war that began in earnest in 1983 and is now Asia's longest-running.

Slowing the offensive is the civilian presence, the military says. Witnesses who have escaped say the Tigers are shooting people who try to flee and making others stay and fight.

The United Nations, European Union and others have all expressed concern about reports of civilian casualties. The military says civilians may have been killed but that the numbers given have been inflated for propaganda reasons.

The military says there are no more than 70,000 people inside the sliver of a war zone that is left, while aid agencies estimate it to be around 200,000.

Among those people are the commanders of the LTTE, the military says. The group is on U.S., E.U., Canadian and Indian terrorism lists for their widespread use of the suicide bomb to kill enemies, politicians and civilians alike.

Meanwhile, the military said police in the eastern port of Trincomalee said they had recovered an SAM-14 surface-to-air missile suspected to have been hidden by the LTTE.

Despite having an arsenal impressive even by formal military standards, that particular weapon has been noticeably missing from the battlefield amid repeated air force helicopter strikes that have helped propel the swift offensive.

The LTTE say they are fighting to establish a separate state for Sri Lanka's Tamil minority, which complains of decades of mistreatment by successive governments led by the Sinhalese ethnic majority since independence from Britain in 1948.

(Additional reporting and writing by Bryson Hull; Editing by Valerie Lee)