"Neither side wants to make the first move." (photo Elmo Fernando)

However, neither the government nor Tamil Tiger rebels are prepared to take the first step to revive peace talks, Yasushi Akasi said.

Japanese special envoy was speaking at the end of a week of talks on the island with political leaders and the rebels.

He said he believed the government is showing "some flexibility" in its dispute with Tamil Tiger rebels.

In response to a query from Sri Lanka government's peace secretariat (SCOPP) representative at the media briefing whether there is any “magical formula” to bring the two parties back to the negotiating table, the Japanese envoy said that “it is yet to be found”.

Japan is Sri Lanka's biggest aid donor, and pledged $4.5bn last year if progress was made in the peace talks.

The BBC's Dumeetha Luthra in Colombo says there are no signs that Japanese envoy has achieved any tangible signs of progress in the peace process.

'New ideas'

"Neither side wants to make the first move," Akashi told journalists in the capital, Colombo.

In an interview with the BBC, he said he faced "a lot of pessimistic feeling from politicians and observers".

"So the positive and negative forces are fighting each other and I'm hoping in the end the positive voices will prevail [on both sides] and somehow they will meet each other half way."

JVP on ISGA  I have detected a degree of willingness to examine the ISGA proposals by the JVP

Akashi said he was convinced that neither the Tamil Tigers nor the Sri Lankan government wanted a resumption of hostilities, even though "obstacles" remain.

He said that President Chandrika Kumaratunga had put forward some "new ideas" to resolve the dispute, and that her coalition ally, the JVP - was showing a degree of flexibility.

The Japanese envoy also said that he had raised the allegations that the Tigers are responsible for political killings and child recruitment in the east of Sri Lanka.

But he said that he received the "usual answers" from the rebels, who regularly deny such charges.

The Tamil Tigers said on Monday that efforts by the Japanese special envoy to Sri Lanka to end the stalled peace process have not been productive.

'Window of opportunity'

Rebel spokesman SP Tamilselvan said that they still wanted interim self-rule in the north and east.

But he said that the government had indicated that it was not prepared to resume talks on this issue.

Akashi surprised by LTTE's description of talks

"Mr Akashi did not bring any realistic or productive message from the government. The present climate does not facilitate a permanent solution, because the government is making different statements every day," he said.

The Japanese envoy responded by saying that he was surprised by Tamilselvan's description of their discussions.

The speed towards the resumption of negotiations has been slower than expected.

"My actual meeting was far more encouraging, and Tamilselvan was fully aware that we are at an important turning point, and there's a unique window of opportunity."

Japan has actively supported efforts by Norway to end the Sri Lanka dispute, which has claimed more than 60,000 lives.

It pledged $4.5bn at a donor's conference in Tokyo last year, but that money is tied to progress in the peace process, and so far no funds have been released.