Soldiers captured the bases of the Liberation Tigers of Tamil Eelam (LTTE) during an offensive late Friday and early Saturday in the eastern Batticaloa district, the ministry said.

"The army confirms that 30 LTTE terrorists have been killed in the confrontations, including three who had committed suicide in desperation," the ministry said in a statement.

It said one soldier was killed and 17 others were wounded in the battles.

There was no available comment from the rebels. Both sides are known to inflate the losses of the other side while playing down their own casualties.

The report came as Japan's special envoy, Yasushi Akashi, was ending a four-day visit to the island Saturday. He said he was hopeful that the troubled peace process could be salvaged.

The escalating fighting since December 2005 has shattered a 2002 truce brokered by Norway. Since then, more than 5,000 people have been killed in the ethnic conflict.

Yasushi Akashi, 76, a former UN diplomat and trouble shooter in Cambodia and Kosovo, said the run-up to his visit had been marred by an upsurge in fighting in the north and east of the island that left scores of combatants dead.

"The atmosphere was rather heavy, depressed, with a serious crisis and tension in the country," he told reporters here.

"I am going back with a certain amount of hope and optimism for the future of this country."

Japan had no immediate plans to slash aid to Sri Lanka or freeze assets of Tamil Tiger rebels although international human rights groups have been lobbying Tokyo to exert pressure to stem spiralling violence, he said.

"Some donors have decided to suspend or discontinue assistance to Sri Lanka," he said referring to moves by Sri Lanka's former colonial ruler Britain and Germany, who have frozen debt relief due to rights concerns.

"We are not comfortable about conditions of aid... Our help is for victims of the conflict. People should not be punished for actions or policies of their leaders," Akashi said.

Japan accounts for about two thirds of bilateral aid to the island.

During his visit, the government on Thursday evicted hundreds of ethnic Tamils staying in low-budget hostels in Colombo at gun point and bussed them to a detention centre in Vavuniya, 260km north of here.

The early morning raids were condemned around the world and Sri Lanka's president Friday invited Tamils back to the city, and ordered a disciplinary probe against the police chief responsible.

Akashi was concerned at the manner in which the raids were carried out and said he was glad the president overturned the decision.

Though Akashi has been trying to help bring the warring parties back to the negotiating table, he did not meet with representatives from the Liberation Tigers of Tamil Eelam (LTTE) during the visit.

"The intense fighting and the need to promote a political solution through all party talks prevented me from visiting LTTE areas this time," he said, adding that he was also "disheartened" by the slowness of the peace process.

"The principal actors are the Sri Lankan people. They have to make up their minds. Outsiders, however powerful they are, have to be patient. We are all well aware of our limited and but useful role."

The LTTE has been fighting for a separate homeland for minority Tamils in a 35-year old ethnic conflict that has claimed over 60,000 lives.