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Wednesday, 2 January, 2002, 16:08 GMT
Sri Lanka eases Tamil embargo
Aftermath of rebel attack on Colombo airport
An attack on Colombo airport shattered tourism
The Sri Lankan Government has announced a major easing of an economic embargo on rebel-held areas in the north of the country.

The move - a key demand of the Tamil Tiger rebels - increases hope that the recently-elected Prime Minister, Ranil Wickramasinghe will fulfil his pledge to bring about peace talks.

Nearly all goods will be allowed to be traded in the north when the sanctions are eased on 15 January.

Both the Tigers and the Sri Lankan military are currently observing a ceasefire in a conflict estimated to have cost more than 64,000 lives.

Explosives ban

A Defence Ministry statement issued on Wednesday said only a small number of items would still be banned after 15 January.

They include arms, explosives and binoculars.

Ranil Wickramasinghe
Wickramasinghe hopes to end the stalemate

In addition, restrictions will be maintained on four other items, including fuel and cement.

"The government is fundamentally committed to doing all in its power to improve the living conditions of people in every part of Sri Lanka," the statement said.

In another development, the Tamil Tigers announced on Wednesday that a Norwegian mediating team would meet the group's chief negotiator, Anton Balasingham, in London this Friday.

A Tiger statement said that the group's leader, Velupillai Prabhakaran, had asked for Norway's "continuous engagement" in efforts to start talks with the government.

The success of Mr Wickramasinghe's United National Party in last month's parliamentary elections opened the possibility of ending the long-running stalemate between the military and the rebels.

Negotiations broke down last June after the previous government led by President Chandrika Kumaratunga accused Norway of bias towards the Tamils.

Economic havoc

The current ceasefire began on 24 December and is due to last one month.

It is the first time for seven years that both sides have observed a halt in hostilities.

The Tiger's campaign for self-determination for the country's Tamil minority has wreaked havoc on Sri Lanka's economy.

The government has been spending more than $850m a year on the war effort, and has more than 100,000 troops deployed in the battle against the Tigers.

Last July the Tigers carried out one of their most audacious raids.

Their attack on the country's only international airport in the capital, Colombo, and an adjacent military base left at least 18 people dead.

It again shattered confidence in the island's vital tourist industry.

The national carrier, Sri Lankan Airlines, said it suffered losses of $350m with three of its Airbuses completely destroyed in the raid and three others badly damaged.

Eight Sri Lankan air force planes were also destroyed.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Duncan Bartlett
"The lifting of economic sanctions has been a key rebel demand for negotiations"
See also:

22 Dec 01 | South Asia
Sri Lanka seeks Indian support
21 Dec 01 | South Asia
Sri Lanka enters truce with rebels
19 Dec 01 | South Asia
Sri Lanka's new parliament sworn in
09 Dec 01 | South Asia
Sri Lanka's new PM sworn in
12 Dec 01 | South Asia
Tamil Tiger attacks in Sri Lanka
07 Dec 01 | South Asia
Analysis: Sri Lanka's hopes for unity
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