Troops fighting to secure a strategic road along the coast to the northern peninsula of Jaffna have faced stiff resistance from the Liberation Tigers of Tamil Eelam (LTTE).
The ministry said that the soldiers had taken Palavi, a small town on the road.
It described the town as an LTTE "strongpoint.
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Security forces have said they are advancing on Kilinochchi, the political capital of the Tamil rebels, though their plans have been delayed due to Tamil defence action and monsoon rains.
Military sources said fighting has raged in the northern regions with both sides suffering casualties, though no details were available.
Jaffna, an area of 2,300 square kilometres (900 square miles) was taken from the Tigers in 1995.
But the lack of land access meant that it has had to be supplied via expensive sea and air routes.
Tens of thousands of people have died on both sides of the conflict since 1972, when the LTTE launched its campaign to carve out an independent state in the Sinh