Intelligence reports suggest the Tigers have assembled two small fixed-wing planes which could be used to blow up large installations using suicide pilots.

The clandestine Voice of Tiger radio said two aircraft were used on Friday as part of their heroes week celebrations to commemorate the thousands of rebels killed in the 15-year conflict.

Tamil Tiger leader: Ready for talks

The aircraft were said to have dropped flowers on a cemetery where fighters are buried in Mulliya Dali in the Tiger-controlled area of the north-east.

It is not clear if they were helicopters or fixed-wing aircraft.

The radio report comes a week after Sri Lankan authorities installed anti-aircraft guns at the national parliament in the capital Colombo.

Military officials said they had no firm evidence the rebels had airpower, but admitted the navy had recently fired at unidentified flying objects in the north of the island after seeing flashes on a radar screen.

Our Sri Lanka correspondent Susanna Price says the Tigers already have well-equipped ground troops and a fleet of boats but this is the first time they have referred to using aircraft.

'We have not closed the doors on peace'

Meanwhile, the Tigers' leader has said he is willing to hold initial talks with the government to pave the way for formal negotiations to end the war.

In a speech to mark the end of heroes week, Vellupillai Prabhakaran said: "We have not closed the doors for peace. We are open to the civilised method of resolving conflict through rational dialogue."

The Tigers are fighting for a separate homeland for minority Tamils.

Peace talks were initiated by the government in 1994, but broke down the following year after the Tigers blew up two navy boats.

Mr Prabhakaran said he preferred third-party mediation, and would not accept conditions. In the past, the government has demanded the Tigers relinquish some weapons before discussions begin.

The island's only civilian flights, which were running between Colombo and Jaffna in the north, were stopped last month after one of the planes disappeared off the West Coast and was presumed to have been shot down by the Tigers.