The defence ministry placed its losses at nine soldiers killed and 45 hospitalised while military sources listed another 45 troopers as "walking wounded.
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The ministry said the Liberation Tigers of Tamil Eelam (LTTE) and security forces were locked in combat near their de facto border in the Vavuniya district and that a total of 20 rebels were killed in the past two days.
However, the pro-rebel Tamilnet.
com website said the Tigers lost only six fighters and reported killing 60 Sri Lankan troopers and beating back a military advance.
"The Sri Lanka army soldiers were forced to flee the battlefield with tractor loads of dead bodies," Tamilnet quoted an unnamed Tiger official as saying.
Following the fall of the former Tiger bastion of Vakarai in January, the military has vowed to flush out the rebels from the east of the island.
The guerrillas said about 2,000 families in the area were displaced by the latest heavy fighting.
Defence ministry spokesman Prasad Samarasinghe