Colombo  - Government troops entered the last rebel-held town in northern Sri Lanka after heavy clashes overnight, military officials said Tuesday.

Troops entered Pudukudirippu, 385 kilometres north-east of the capital and were consolidating positions Tuesday morning, the army said.

It said Tamil rebels sustained heavy casualties in combat Monday and lost a large amount of weapons in the area.

The army said its forces suffered minor damage, but did not give any casualty figures for either side. There was no independent confirmation of the military operations.

The latest offensive push came one day after the government rejected a rebel offer to negotiate a ceasefire.

The Liberation Tigers of Tamil Eelam (LTTE) had called for a truce, but refused to surrender any weapons.

Defence spokesman Keheliya Rambukwella dismissed the proposal as "hilarious," and said it came just as the LTTE was "all but defeated militarily."

Rambukwella was reacting to a letter sent by P Nadesan, leader of the rebels' political wing, to the United Nations and international monitors from the United States, Norway, Japan and the European Union.

Nadesan said the rebels were ready to cooperate for an immediate ceasefire and work towards a political settlement.

"The country and the world are quite aware of the nature of the LTTE. It is a ploy used by the LTTE over two decades when it is about to be militarily defeated," Rambukwella told the state-run newspaper Daily News. "Every time the LTTE is on the verge of defeat militarily and losing weapons and equipment, then it calls a truce."

He called on the rebels to surrender and to release all civilians under their control.

"There will be no ceasefire until terrorism is defeated," he said.

About 70,000 civilians are estimated to be trapped in the conflict zones of the north-eastern Mullaitivu district. The military claims the rebels are confined to an area of less than 80 square kilometres.

The government said it has entered the final phases of a military drive launched in August 2006 to recapture rebel-held areas in the north and eastern parts of the country. (dpa)