The Sri Lankan Government and opposition Tamil Tigers have appealed for investment as donors gather in Norway for peace talks to end nearly two decades of civil war.

In an unprecedented move, the two sides issued a joint statement calling for international help as more than 20 countries - including the US and Britain - prepared to meet in Oslo.

Some moderate financial assistance can be expected with conditions attached

Rauf Hakeem Sri Lankan cabinet minister

On Sunday, Sri Lanka's Prime Minister, Ranil Wickramasinghe, and a leader of the Liberation Tigers of Tamil Eelam movement Anton Balasingham, met for the first time in a further confidence building move.

The two sides hope donors will offer economic and political support for the peace process and fund the reconstruction of the south Asian nation of 18.6 million people.

"Some moderate financial assistance can be expected with conditions attached," Rauf Hakeem, a Sri Lankan cabinet minister and delegate at the conference, said.

Economic troubles

Sri Lanka received about $200m in loans last year and has estimated it needs $500m over the next five years to rebuild.

The economy recorded its worst-ever contraction of 1.4% last year as the war escalated.

The Tamil Tigers have been fighting for an independent homeland since 1983 for the 3.2 million Tamils in Sri Lanka, citing discrimination by the majority Sinhalese.

Since the ceasefire signed earlier this year, the Tamil Tigers have agreed to end their push for independence and settle for autonomy.

Key areas for economic assistance include resettlement of refugees, land mine clearance and reconstruction of the northern and eastern parts of the country.

The Tamil Tigers have been classified as a terrorist organisation by the US, India, Britain, Canada and Australia, all of which are attending the conference.

India interests

India said on Friday it would contribute a $100m credit it gave Colombo in 2000, even though it was not sending a high-level team to the meeting.

In the 1980s, India armed and trained the island's Tamil Tigers but severed ties after a truce it brokered between the them and Colombo failed.

India, which has 60 million Tamil citizens, banned the Tamil Tigers after blaming them for the assassination of former Indian Prime Minister Rajiv Gandhi in 1991.

The will be another round of peace talks in Oslo next month and a full donor conference in Tokyo, Japan next year.