Sri Lankan war planes hit Tamil Tiger targets on Tuesday, a day after a suicide bombing killed more than 100 people and derailed efforts to save a collapsing peace process.
The rebels and the government had agreed to hold October 28-29 peace talks in Switzerland before Sri Lanka's worst-ever suicide attack on Monday left at least 103 people dead and 150 more wounded, most of them sailors.
The talks are now in jeopardy, but Norway's special envoy Jon Hanssen-Bauer and the Sri Lankan government's top peace negotiator Nimal Siripala de Silva met Tuesday and discussed a possible agenda for the negotiations.
Even as diplomatic efforts continued to keep the process on track, the Sri Lankan military was launching retaliatory attacks with air force raids on two Tiger sea bases and a Tiger military camp.
"It is believed that the air strikes had inflicted heavy damages to terrorists," the defence ministry said.
The rebel Liberation Tigers of Tamil Eelam (LTTE) said Israeli-built Kfir jets bombed their "Voice of Tigers" radio transmitting tower, but insisted the station would not go off the air.
A government statement said that de Silva, who is also the health minister, asked Hanssen-Bauer to inform the Tigers not take the government's willingness to negotiate as a sign of weakness.
"Mr. Hanssen-Bauer told the minister that he will hold talks with the LTTE too and take further steps in the peace process and to prepare an agenda," the statement from the health ministry said.
Hanssen-Bauer was expected to leave Thursday for the rebel-held town of Kilinochchi for separate talks with the LTTE political wing leader S. P. Thamilselvan.
The Sri Lankan defence ministry, also reeling from a major battlefield defeat last week in the northern peninsula of Jaffna, has been conducting air raids on Tiger areas since Monday's bombing.
"Air force (Israeli-made) Kfir jets pounded a Tiger terrorist base in Puthukuddierippu in the evening," the ministry said. "According to intelligence sources, air strikes have completely destroyed the Tiger military base.
However, the pro-rebel Tamilnet.com website said two children were killed and 15 others wounded when four jets struck a civilian settlement and destroyed nine homes.
Japan's special peace envoy Yasushi Akashi was also on the island for talks with President Mahinda Rajapakse.
Akashi is due to hold separate discussions Wednesday in Kilinochchi with the Tigers who are fighting for a separate homeland for the Tamil minority in this Sinhalese-majority country.
International concern over Sri Lanka's deteriorating security situation was led by UN Secretary General Kofi Annan, who described Monday's suicide attack as "appalling".
"The Secretary-General stresses once again that a return to civil war will not resolve the conflict," his spokesman Stephane Dujarric said.
"He calls upon all parties to refrain from the use of force and to return to the negotiation table at the end of this month, as tentatively agreed between the government of Sri Lanka and the LTTE."
The Media Centre for National Security said 51 bodies of sailors had been identified by Tuesday afternoon while efforts were underway to identify another 47 bodies with the military.
Police said they believed at least two Tiger suicide bombers also perished.
Doctors in three hospitals placed the tally at 103 with police saying some of the victims may have been civilian vendors selling tea and sweets to sailors.
In Washington, State Department spokesman Sean McCormack also urged the LTTE to "renounce the use of terror". US Assistant Secretary of State for South and Central Asian Affairs Richard Boucher is due here Thursday.
Diplomats and analysts said the upsurge in violence has left the Switzerland talks in serious doubt, with neither side in the brutal ethnic conflict appearing ready to abandon their military mind-set.
More than 2,300 people have been killed in spiralling violence since December, leaving a truce agreed in February 2002 in tatters.