The leader of the Tamil Tiger rebels in Sri Lanka, Velupillai Prabhakaran, has for the first time stated that his movement is ready to drop its long-standing demand for independence.

We can't ignore the realities of today's world. We have to realise this and adjust our path to freedom

V Prabhakaran

In a speech broadcast on rebel radio, the elusive guerrilla leader, who has led a bloody struggle for self-determination, declared that he would settle for provincial autonomy and self-rule in Tamil-dominated areas in the east and north of the island.

But he also warned that the Tamils would resume their struggle for a separate state if a political solution could not be reached in an on-going peace process facilitated by Norway.

The speech coincided with Martyr's Day, which is held by Tamil Tiger rebels to honour their fallen comrades, and there was heightened interest in it this year because of the peace process.

More than 60,000 people have died in two decades of civil war in Sri Lanka.

Praise

Mr Prabhakaran praised the Sri Lankan Government led by Prime Minister Ranil Wickramasinghe for its "bold" and "honest" approach towards peace.

The rebel leader hardly ever appears in public

But he also asserted that no condition or deadline can be set for the peace talks to resolve the Tamil issue.

He was indirectly referring to US Deputy Secretary of State Richard Armitage's demand that the Tamil Tigers publicly renounce violence and terrorism and Mr Wickramasinghe's remark that the peace talks next year would focus on core political issues.

Mr Prabhakaran also commended the international community for pledging $70m in Oslo earlier this week to reconstruct war-torn areas in Sri Lanka.

Peace moves

23 February: Government and rebels agree a ceasefire 16 September: First round of talks in Thailand 31st October: Second round of talks in Thailand 25 November: Donors pledge money for reconstruction

He, however, added a lot remained to be done to restore full-scale normalcy.

Mr Prabhakaran said it was his deepest desire that the current peace talks would succeed and he said the Tamil Tigers were prepared to discuss all issues.

Hours before his speech, President Chandrika Kumaratunga said the Tigers should give up their weapons in order to demonstrate their sincerity towards peace efforts.

"The issue of decommissioning needs to be addressed right now," her spokesman, Harim Peiris, was quoted as saying.

Black Tigers

The BBC's Frances Harrison, reporting from Tamil-held territory, says the remarks are significant because some Sri Lankans say the rebels do not want to talk about a final settlement because they are not serious about peace.

Streets in north and east Sri Lanka were decorated with red and yellow banners, colours that symbolise a separate Tamil state on Wednesday as part of the Martyr's Day celebrations.

On Tuesday, the rebel group's suicide bombing squad - the Black Tigers - appeared in public for the first time at a parade to commemorate fallen comrades in the civil war.

The Tamil Tigers pioneered the art of suicide bombing with scores of assassinations of prominent politicians in Sri Lanka, as well as former Indian Prime Minister Rajiv Gandhi.