"Our troops have captured Sampur," he said to thunderous applause during the 55th anniversary celebrations for the main component of the ruling coalition.
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"This is not war, we are only responding to an attack on us."
Rajapakse said despite the victory, he still wanted a negotiated settlement to the island's protracted Tamil separatist conflict, which has claimed more than 60,000 lives in the past three decades.
"We need to work together to banish racial hatred and bring peace... the honourable peace promised in my election manifesto," Rajapakse said.
But he also praised army chief Sarath Fonseka, who narrowly survived a Tiger suicide bombing in April, saying the military officer had been able to make a significant impact on the battlefield.
Rajapakse came to powe