Troops took control Wednesday of the A-5 road linking the town of Chenkaladi and Badulla in the central part of the island, defence ministry spokesman Prasad Samarasinghe said.
"Only about 140 square kilometres (54 square miles) of jungle land in the Thoppigala area still remain under LTTE (Liberation Tigers of Tamil Eelam) control and we believe around 300 to 350 rebels are in the jungles," Samarasinghe said.
The latest military advance, which began late February, has left nine soldiers and 184 Tiger rebels dead, he said.
He said there were no civilian casualties during the fighting.
Military action to wrestle the eastern region from the Tigers began last July when the rebels shut an irrigation canal and blocked water to around 15,000 residents in a farming village.
"The Tigers have lost 1,175 cadres, we lost 98 security forces personnel, while two other government soldiers still remain missing (since July)," he said adding around 138,000 people had been displaced since.
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