Defence spokesman Keheliya Rambukwella said the government was firmly committed to wiping out "terrorism" and described the demand for a ceasefire from a Tamil Tiger proxy as "laughable".
"We have taken a policy decision to completely root out terrorism," Rambukwella told reporters here.
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"There will be no ceasefire with the LTTE (Liberation Tigers of Tamil Eelam)."
The ceasefire appeal from the Tamil National Alliance echoed calls from Sri Lanka's key international financial backers, including the US, European Union and Japan, for a "no fire period" to allow civilians to get out of harm's way.
A pro-government Tamil legislator said on Tuesday that 288 civilians had been killed during one week this month while nearly 800 were wounded in crossfire in the shrinking territory still under rebel control.
The fighting has provoked a strong reaction in neighbouring India where 62 million Tamils in the state of Tamil Nadu share close cultural and religious links with the ethnic Tamil minor