The Sri Lankan government and Tamil Tiger rebels have signed a controversial tsunami aid-sharing deal.
Police fire tear gas to disperse supporters of the nationalist JVP
It comes after weeks of protests by a powerful nationalist party and the influential Buddhist clergy, who say it threatens Sri Lanka's sovereignty.
The plan is meant to ensure an equal distribution of aid to all parts of the country hit by December's tsunami, including rebel-held areas.
Tens of thousands of Sri Lankans are yet to receive tsunami aid.
"The government signed the memorandum of understanding," said leader of the house, Maithripala Sirisena, shortly after protests had forced a parliamentary debate to be abandoned.
Norwegian peace brokers then took the document to the northern rebel-held town of Kilinochchi where the Tamil Tigers signed it, bringing the agreement into force.
The Tsunami Joint Mechanism paves the way for the government and the Tamil rebels to share nearly $3bn in foreign aid, and ministers say it could boost stalled peace efforts.
But the BBC's Dumeetha Luthra in Colombo says it has caused internal dissent and split the government.
Ahead of the parliamentary debate, police fired tear gas to prevent hundreds of supporters of the nationalist People's Liberation Front (JVP) from marching on parliament.
Tens of thousands of tsunami-victims are still to get aid
"Down with the Tiger mechanism. Tear up the Joint Mechanism," read banners held up by the protesters.
Inside parliament, JVP MPs prevented a debate on the issue.
A police spokeswoman told the Associated Press news agency that security had been stepped up, especially in Colombo.
"We have got the assistance of the army," Rienzie Perera said.
The joint mechanism, which was made public for the first time on Friday, has a three-member panel with representatives from the government, the Tamil Tigers and the Muslim community.
Donors had pressed for the joint mechanism so that they could avoid channelling funds directly to the Tigers, as many countries list the rebel group as terrorist.
President Chandrika Kumaratunga has strongly backed the aid deal, saying it could help jump-start peace talks with the rebels which stalled two years ago.
But it is bitterly opposed by the JVP which pulled out of Sri Lanka's ruling coalition last week in protest.
It argued that allowing the rebels to participate in the distribution of aid would help them to establish a Tamil state.
The party's withdrawal means Mrs Kumaratunga now leads a minority government, and in the past week she has been trying to build new alliances.
Despite Muslim representation in the mechanism panel, the minority community is unhappy at not being made a full signatory.
Nearly 31,000 people died in Sri Lanka when the tsunami struck on 26 December. Half a million were made homeless.