Heavy fighting raged along three fronts as troops closed in on the town of Kilinochchi, the ministry said.
But it added that the Liberation Tigers of Tamil Eelam (LTTE) were putting up stiff resistance.
"Twenty-seven soldiers have made their ultimate sacrifice for the motherland while 70 others suffered injuries during the battle.
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A few other soldiers have not been able to join with their units so far," a ministry statement said.
It said intercepted radio transmissions of the Tigers indicated that they had also suffered heavy casualties.
"Over 120 LTTE cadres have been killed and 80 others injured in the Kilinochchi area since Sunday morning," the ministry said.
The ministry statement came as the Tigers announced through the pro-rebel Tamilnet.
com website that 43 government troops had been killed and 70 more were wounded in a confrontation northwes