Sri Lanka has declared a state of emergency after Foreign Minister Lakshman Kadirgamar was assassinated in a gun attack in the capital, Colombo.
The emergency powers allow the government to deploy troops freely
President Chandrika Kumaratunga has appealed for "calm and restraint".
The killing was blamed by a senior police officer on the Tamil Tiger rebel group, which has been observing a ceasefire since 2002.
But the rebels have denied killing the foreign minister, a Tamil who was a fierce critic of the group.
"We strongly condemn this attempt to put the blame on us and we strongly deny any involvement in this assassination," SP Tamilselvan, who heads the rebels' political wing, told the BBC's Tamil Service.
Correspondents say that the rebels have rarely accepted responsibility for many of the attacks they have carried out in the past.
The Norwegian monitors overseeing the truce have warned that the killing could put the ceasefire at risk.
Kadirgamar was shot at his heavily-guarded home on Friday evening.
Police believe one or two snipers carried out the attack, hitting the veteran minister several times in the head and chest. He died in hospital despite emergency surgery.
The president said Mr Kadirgamar, 73, had been killed by "political foes" but stopped short of accusing the Tamil Tigers.
"A state of national emergency has been declared to facilitate enhanced security measures and effective investigations of this wanton act of terror," her office said in a statement.
Ms Kumaratunga described the minister as "a hero of our times", adding: "He waged a relentless war against terrorism in all its forms despite continuous threats to his life."
A large security operation was launched after the shooting, with armed police cordoning off the area as helicopters circled overhead.
Under the emergency powers:
- the authorities can deploy troops freely
- detain without charge anyone suspected of terrorist activities
- search and demolish buildings.
Dozens of military trucks are said to have moved into Colombo and soldiers have set up roadblocks in the city.
All vehicles coming in and out of the city are being checked and navy patrol boats have been deployed to guard the coastline.
Police sources said two men had been arrested but gave no further details.
Feb 2002: Government and Tigers sign permanent ceasefire paving the way for talks
Dec 2002: Both sides agree to share power with autonomy for Tamils in north and east
Apr 2003: Tigers suspend peace talks saying they are being marginalised
Mar 2004: Renegade Tamil Tiger leader Col Karuna splits the group in the east
Apr 2004: President Kumaratunga returns to power but falls short of absolute majority
Jul 2004: Suicide bomb blast in Colombo - the first such incident since 2001
Dec 2004: More than 30,000 killed in tsunami. Tamil areas badly affected
Jun 2005: Tsunami aid sharing deal reached with Tigers amid protests
A senior police officer quoted by Reuters blamed the rebels, who want an autonomous state in the north, for carrying out the attack.
"It's the Tigers," Inspector General of Police Chandra Fernando told reporters, the agency said.
Mr Kadirgamar had considered himself to be a potential target of the group, reports said.
Vilja Kutvonen, spokeswoman for Nordic Sri Lanka Monitoring Mission, told Reuters the minister's death was a big blow to the peace process.
She said: "It's likely to have serious consequences. It puts the whole ceasefire under risk."
The truce has recently been under growing strain, amid rebel claims that the government was continuing to conduct a covert war against them.
He was appointed foreign minister in April 2004, but had previously held the position from 1994 to 2001.
A lawyer by training, Mr Kadirgamar was seen as a tough opponent of the Tamil Tigers. He played a key role in getting the group listed as a banned militant organisation in the US and the UK.
Neighbouring India condemned what the foreign ministry described as a "terrorist crime" and offered its full support. US Secretary of State Condoleezza Rice, who last met Mr Kadirgamar in June, said those responsible must be brought to justice.
She praised Mr Kadirgamar as a man of "dignity, honour and integrity, who devoted his life to bringing peace to Sri Lanka".
"Together, we must honour his memory by re-dedicating ourselves to peace and ensuring that the ceasefire remains in force," she added.
UN Secretary General Kofi Annan said in a statement quoted by the AFP news agency:
"Sri Lanka has lost a deeply respected statesman dedicated to peace and national unity."