"Parappakandal is a strategically important both to the LTTE (Tamil Tigers) and us," military spokesman Udaya Nanyakkara said.
Troops entered the Parappakandal town area Thursday morning, breaking through heavy Tiger resistance.
"They even tried to intensify resistance and block our advance by deploying four of their leaders like Lakshman, Banu, Ramesh and Jeyam in the area," Nanayakkara said.
"But later they withdrew. With the capture of Parappakandal we will be able to completely dominate the area and hinder LTTE supplies."
Casualty figures were not yet available, he said.
The Tamil Tigers use a coastal town north of Mannar, Vedithalathivu, to land supplies from the sea and take it by land across the Mannar area to the Tiger