At least 13 sailors have been killed in a mine attack on a convoy in north-western Sri Lanka, officials say.
The army said a mine was detonated as a navy bus and truck passed by in Mannar district and blamed Tamil Tiger rebels.
The killings would be the worst breach of the 2002 ceasefire, but on Friday the Tigers said they were not connected with the incident.
International peace monitors said the situation was "alarming" and that the truce was in jeopardy.
The Sri Lankan government condemned the "pre-planned and inhuman attacks" as "an impediment to the government's efforts to achieve peace".
However, it said the attack would not deflect it from its goal to achieve peace.
The attack took place in Pesalai, 220km (135 miles) north of the capital, Colombo.
About 30 sailors were travelling on the bus and truck. Four injured personnel were taken to hospital, the ministry said. Two are reported to be in critical condition.
Reports say there were two explosions, one a claymore fragmentation mine and the other either an anti-vehicle mine or a rocket-propelled grenade.
Tamil Tiger spokesman Daya Master told the BBC there was "no connection whatsoever" between the rebels and the attack.
But the BBC's Dumeetha Luthra in Colombo says there is now real concern Sri Lanka may slip back into conflict.
International peace monitoring head Hagrup Haukland said: "The ceasefire agreement is in jeopardy, absolutely. The situation is alarming."
Friday's explosion came after Tamil Tiger rebels confirmed three Sri Lankan sailors had died in an exchange between Tiger and navy vessels off the north-western coast.
About 30 military personnel have been killed this month
Truce monitors say under the terms of the 2002 ceasefire, the Tamil Tigers are not allowed to operate at sea.
Government officials say the clash happened after the rebels, who the say were hiding among a fleet of fishing boats, opened fire on the naval boats.
It is not clear whether the sailors were killed in the firing or had drowned.
The head of the rebels' political wing, SP Thamilselvan, accused the Sri Lankan navy of opening fire on the Tamil Tigers.
"Our members had to return fire for self-protection," he said in a letter to Norwegian peace monitors.
"Please be advised that our members will continue this practice of travelling in the seas with arms for self-defence," he said.
Friday's explosion followed a fatal naval exchange in the north
The head of the Sri Lankan Monitoring Mission said the rebels had no right to be at sea or even armed.
"This is adding more petrol to the fire," Hagrup Haulkand told Reuters.
There has been rising tension in the area since the beginning of this month due to clashes between the government and the rebels.
Last month Tiger leader Velupillai Prabhakaran issued an ultimatum to the new government to come up with a political settlement within the next year or face an "intensified struggle for self-determination".
President Mahinda Rajapakse then made an offer to hold talks with the Tigers anywhere in Asia and said he was "ready for talks as soon as the Tigers were ready".
Japan had offered to play host.
But the rebels rejected the government's offer, insisting talks be held in Europe.
The Tigers want a separate homeland in the north and east.
The bloodshed in three decades of conflict has cost more than 60,000 lives.