Nearly 40,000 civilians have fled LTTE-held areas in three days

ICRC spokesman Davide Vignathi told BBC Tamil Service that the latest influx has joined thousands of existing Internally Displaced People (IDPs) in Batticaloa.

"This brings up the total number of IDPs presently sheltering in Batticaloa district to 120,000," he added.

The ICRC called on aid organisations for more help as refugees in Batticaloa face a huge shortage of food and water.

Food and water

Aid workers and the local authorities are working on setting up new camps for the influx of ne arrivals in addition to the existing 25 in Batticaloa district and providing them with food and shelter, the spokesman said.

	Military says LLTE suffered heavy casualties in recent fighting

After a lull that lasted for weeks in the war front, fighting between the LTTE and the government forces has been escalating in the east of Sri Lanka.

Overnight, there was a confrontation when a group of rebels crossed into Government-held territory.

Five soldiers were wounded and the army claims the Tigers suffered heavy casualties.

Soldiers wounded

The rebels, who have fought for decades for an independent homeland for the Tamils in the north and east of Sri Lanka, have not commented on the reports.

BBC's Roland Buerk in Colombo says after driving the Tigers from areas along the coast in months of battles, the Government now seems to be moving to take the remaining pockets of the Eastern province they still hold.

The rebels have said the Government is trying to push them into a full-scale war and they've warned the conflict could engulf the entire island.