Sri Lanka says the ship carried weapons to Tamil Tigers

A navy spokesman said the ship was destroyed during an eight-hour battle near Kanthale after its crew refused to stop to allow the vessel to be searched.

The spokesman said the ship had been intercepted about two-hundred kilometres off the east coast of Sri Lanka. Casualty figures remain unclear.

LTTE military spokesman Rasiah Ilanthirayan told bbcsinhala.com that he was yet to find out details of the incident.

If confirmed, the attack will be the latest in a series of sea battles between the Tigers and Sri Lankan forces.

Last week both sides agreed to take part in peace talks in the Norwegian capital, Oslo.

On Saturday, President Mahinda Rajapaksa has told the BBC he was hoping for a political solution at next month's talks.