Anbarasan Ethirajan BBC Sri Lanka correspondent

It said the bodies of the rebels and their weapons had been recovered. There has been no comment yet from the rebels.

The latest clashes came as the US secretary of State Hilary Clinton joined the United Nations in expressing deep concern over mounting deaths inside a government-designated safe zone set up to protect civilians.

The Sri Lankan defence ministry says its troops are now engaged in the final phase of their offensive to capture remaining Tamil Tiger strongholds in the north-eastern Mullaitivu district.

In a ferocious battle in the Puthukudiyirruppu area, it said eighteen rebels were killed and their bodies had been recovered.

Civilians Rescued

The ministry said troops had also rescued nearly sixty civilians who were attempting to flee the war zone.

There's no independent confirmation of the defence ministry's version of events.

The escalation in the fighting comes amid growing international pressure on the Sri Lankan government over reports of increasing civilian casualties in the conflict zone.

US concerns

In a telephone conversation with the Sri Lankan President Mahinda Rajapakse on Friday, the US Secretary of State, Hilary Clinton expressed her deep concern over the mounting death toll in a government-designated safe zone set up to protect civilians.

A press release from the US embassy in Colombo said Ms Clinton also told him that Sri Lankan troops should not fire into civilian areas in the conflict zone and urged him to allow humanitarian groups full access to people in need.

Ms Clinton's comments coincided with a statement by the United Nations High Commissioner for Human Rights, Navi Pillai, saying that according to credible sources almost three thousand civilians may have been killed in the fighting over the last two months.

The Sri Lankan government has rejected the UN's figures saying they were unsubstantiated.