Donors warn over Sri Lanka poll

The economy and security are likely to be key election issues

Foreign aid donors have urged all sides in Sri Lanka not to undermine the island's shaky peace process ahead of presidential elections in November.

The US, EU, Japan and Norway said the assassination of Foreign Minister Lakshman Kadirgamar had cast a shadow over peace moves with Tamil rebels.

They also expressed fears about war rhetoric in the election campaign.

Sri Lanka's economy and peace moves are set to be central themes in the 17 November vote.

The peace process... is facing its most serious challenge since the cease-fire agreement came into force in February 2002 Donors' statement

The donors said the only way to end Sri Lanka's ethnic conflict was a negotiated political settlement based on a federal state for Tamils.

"The co-chairs look to all parties to refrain from violence and from statements and acts that could undermine progress toward the peaceful resolution of the conflict after the elections," they said, in a statement issued on Monday in New York.

The statement called the 12 August assassination of Mr Kadirgarmar an "unconscionable act of terrorism", but stopped short of blaming the rebels directly, as the government has.

The Tigers denied involvement in the killing.

Economy

The 17 November election will pit current Prime Minister Mahinda Rajapakse against opposition leader and former Prime Minister, Ranil Wickramasinghe.

Mr Rajapakse, the ruling party candidate, says he will overhaul the Norwegian-mediated peace process and dump plans for a Tamil federal state.

Mr Wickramasinghe has pledged to revive the federal peace deal with the Tamil rebels and restore investors' faith in the economy.

The poll was prompted by a Supreme Court ruling last month that said current President Chandrika Kumaratunga's term must end this year.

The constitution limits presidents to only two terms in office.

Although the truce with the rebels is under renewed strain, correspondents say Sri Lanka's electorate is more concerned with the rising cost of living and rampant inflation.