At least 43 Sri Lankan troops were killed and over 220 wounded in a fierce battle with Tamil Tiger rebels in the country?s far north, the military said yesterday.

Another 25 to 30 were missing after Wednesday?s fighting, the military said. The flare-up in violence has spurred fears that peace talks due this month may cancelled. Artillery duels continued to rage yesterday around the army-held northern Jaffna peninsula, cut off from the rest of the island by rebel lines. Residents heard fighter jets fly towards Tiger territory and explosions in the distance.

The Liberation Tigers of Tamil Eelam (LTTE) said they had laid out the corpses of 61 troops on a playground in their northern stronghold of Kilinochchi, and invited the Red Cross to go and remove them. A row of bloody corpses were shown in graphic detail on pro-rebel Web site www.tamilnet.com. The Tigers said 10 of their fighters were killed but the military estimates they killed more than 200 rebels.

The Tigers say they have recovered the corpses of 75 troops from inside their territory after what they say was a military offensive. The security forces deny crossing into rebel territory, but have blocked truce monitors from inspecting the area.

The military pasted a grisly photo of its own of dead fighters in the rebels? characteristic Tiger-striped camouflage on its own Web site www.nationalsecurity.lk. ?The battle happened in no-man?s land, between our forward defence lines and theirs,? said military spokesman Prasad Samarasinghe. ?They don?t have 75 bodies. Some people are missing ? about 25-30 troops. They must be having those bodies.? He said the foes continued to exchange artillery and mortar fireyesterday morning, but said there was no close-quarter fighting.

The Tigers and the military each accuse the other of provoking the fighting, which political analysts and the international community fear could derail peace talks due in Geneva on October 28-29. Mediator Norway said its special peace envoy Jon Hanssen-Bauer would visit the island next week, his second visit in a month, while the island?s chief financial donor Japan was due to send its own envoy, Yasushi Akashi. The fighting, some of the worst since a tattered 2002 truce, came after the Tigers warned any further incursions by the military could prompt a full-blown return to a war that has killed more than 65,000 people since 1983, including hundreds since the ceasefire.

The United States was alarmed by the latest rash of fighting. ?The United States welcomes the agreement between the Sri Lankan Government and the Liberation Tigers of Tamil Eelam to return to talks ... but is deeply concerned that ongoing violence in Sri Lanka is putting the agreement at risk,? State Department spokesman Sean McCormack said in a statement in Washington. ?We call on both sides to cease hostilities immediately and foster an environment that is conducive to holding productive discussions in Geneva,? he added. ?We also urge both sides to ensure that non-government entities involved in humanitarian relief efforts are provided access to conflict-affected areas.?