Liberation Tigers of Tamil Eelam rebels moved in on Friday against a renegade, killing at least 10 people and sending thousands of civilians fleeing for safety, in the first clashes since Sri Lanka entered a ceasefire in February 2002, military sources said.

The rebels fired artillery, mortar bombs and automatic assault rifles in a twin-column advance under cover of darkness, resuming the offensive late Friday forcing the renegades to withdraw from key positions, the sources said.

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The sources estimated that at least 20 rebels and two civilians died in the fighting in the east of the ethnically divided island.

The main Tiger group, however, confirmed the deaths of only eight combatants. Aid workers and medical staff said two civilians died.

Thousands of civilians were fleeing the fighting, said Sukumar Rockwood, a spokesman for the International Committee of the Red Cross in Colombo.

"We are watching the situation very closely and monitoring every minute," Rockwood said. "If it gets worse, we are ready to move in quickly and help."

Seven child soldiers were among 15 people treated at two hospitals in Batticaloa, south of Trincomalee port, doctors said.

The Tigers have long faced international criticism for use of underage fighters.

The rebel leadership based in northern Sri Lanka has vowed to get rid of V Muralitharan, better known as Karuna, who on March 3 broke away from the LTTE, saying they ignored the interests of Tamils in the east.

The internecine fighting broke out a week after elections narrowly won by President Chandrika Kumaratunga's Freedom Alliance, which includes hardliners opposed to concessions to the rebels.

The main Tiger outfit this week called for a revival of peace talks with the incoming government but warned it would return to fighting if it was not granted self-rule.

Diplomats said the fresh fighting further dimmed prospects for reviving peace talks, which have been stalled since April.

More than 60,000 people have died in the three-decade campaign by the LTTE to set up a separate homeland for the Tamil minority.

Karuna was estimated to command some 5,000 to 6,000 cadres, or about a third of the LTTEs' original fighting force.

Unable to resist the offensive, Karuna's renegades pulled back Friday from a riverbank that had marked the factional frontier border between the districts of Trincomalee and Batticaloa, the sources said.

They said the sudden shift in the frontline left government forces, who are neutral in the LTTE' internal conflict, exposed to crossfire.

Sri Lanka's military chief Lionel Balagalle and navy chief Daya Sandagri traveled in the districts of the factional fighting on Friday to inspect the status of security forces.

Thousands of government troops guarding the main highway linking Batticaloa with the eastern government-held town of Polonnaruwa faced potential danger from the fighting, the sources said.

Karuna's spokesman, Varadan, told AFP by telephone: "They initiated the attack and we are resisting."

But Tamilnet, a pro-rebel website, said more than 300 "young fighters" of Karuna's group "surrendered without a fight."

Government forces and police throughout the country were immediately placed on heightened alert fearing that security personnel could get sucked into the LTTE's internal battle.

Scandinavians monitoring the 2002 ceasefire between the government and the rebels said they were concerned about the fighting but stopped short of calling it an outbreak of hostilities.

Hans Brattskar, the top envoy in Colombo of peace broker Norway, met the new Prime Minister Mahinda Rajapakse as the fighting raged.