When he ran for the presidency, Rajapakse was widely regarded as a hardliner and dubbed the "war candidate" by Tamil rebels.
He promised a new approach to bring an "honourable peace" to the tropical island nation racked by more than three decades of ethnic conflict that has claimed over 60,000 lives.
But after winning the election, he said he would instead persist with the Norwegian-backed peace initiative supported by his predecessor.
Since then, 3,422 people have been killed in ethnic violence, defence ministry figures show.
The violence resulted in a 45-percent increase in defence spending to 1.29 billion dollars in the 2007 budget.
The president, who turned 61 Saturday, justified the soaring defence spending by citing escalating Tamil Tiger attacks that have dogged his rule.
"Increased violence compelled the government to channel more resources for security," he said Rajapakse.
The Liberation Tigers of Tamil Eelam (LTTE), who are fighting for an independent homeland, walked out of peace talks in June, and the latest negotiations in Geneva in October ended in failure.
The president again offered to resume talks with the Tigers last week, but the guerrillas dismissed his call to lay down arms and enter negotiations to build a "new Sri Lanka".
The president has clinched a deal with the main opposition United National Party (UNP) to support him for at least two years in parliament, where his government is in the minority.
Political analyst Sunanda Deshapriya said Rajapakse's contradictory alliances with the right-wing but pro-peace UNP as well as with Marxist and militarist fringe elements had hamstrung his administration.
"We've seen one year of his presidency during which he could not effectively address any of the burning issues because he had alliances with diversely opposite political groups," said Deshapriya, a director at the Centre for Policy Alternatives think-tank.
"It was not a very successful year," he said.
The administration is under pressure from foreign aid donors to renew its peace process with the rebels after the collapse of talks last month.
Britain sent special envoy Paul Murphy here last week to talk with the warring sides.
The government has also for the first time been accused by the United Nations of supporting the forcible recruitment of child soldiers on behalf of a pro-military Tamil rebel faction that is also fighting the Tiger rebels.
Rajapakse, who championed human rights during a state crackdown against Marxist rebels in the late 1980s, is now accused of not taking action to rein in his security forces amid increasing "disappearances."
Former airforce chief Harry Goonetileke, a political advisor to Rajapakse's predecessor, said the president must end his ties with the Marxists who oppose any concessions to the rebels, pursue talks with the Tigers and start constitutional reforms.
"He must make a clean break with the Marxists and place on the table a political package to share power with the (minority) Tamils," Goonetileke said.
Despite the escalating violence, the economy has performed well and is set to record growth of more than seven percent this year -- the best in 28 years.
The growth is down to better-than-expected foreign remittances from Sri Lankans working abroad as well as expansion in the services and agriculture sectors.
But Sri Lanka's business community says defence spending is a concern.
"The massive increase in defence expenditure overshadows the spending on productive sectors, placing the country on a 'war footing' which may send out negative signals to investors," a group of business organisations said.
The International Monetary Fund warned last week the country could be headed for an economic crisis if the seemingly unending conflict was not peacefully resolved soon.

Copyright AFP (Agence France-Presse), 2006