Thousands of people have fled their homes in north-eastern Sri Lanka as the military launched fresh air strikes on Tamil Tiger targets.
Rebels said nearly 30 civilians had been injured in the strikes
About 40,000 people were moving north to seek safety in the jungle, local officials told a BBC correspondent.
At least 15 civilians have died since the strikes began on Tuesday, a rebel leader in Trincomalee district said.
The strikes were in response to a suicide attack on army headquarters, which killed at least eight people.
The army said three people had been killed and at least 11 were injured in a rebel attack overnight, but rebels denied the attack.
The BBC's Dumeetha Luthra in Colombo says the situation is going from "crisis to crisis" as families leave their homes in rebel-held territory near Trincomalee.
An emergency meeting of the co-chairs of the Sri Lankan peace process has been called for Friday in the Norwegian capital Oslo.
Meanwhile efforts are continuing to persuade the rebels to return to peace talks in Switzerland.
The Sri Lankan government has offered to provide a sea plane to transport Tamil Tiger regional leaders to confer with each other beforehand.
The rebels pulled out of negotiations last week in a dispute over transport arrangements for their eastern commanders.
Palitha Kohona, special adviser to the Sri Lankan president on the peace process, told the BBC that raids against the Tamil Tigers would cease if they agreed to attend peace talks.
Rebel spokesman S Puleedevan said the Tigers would attend peace talks in Geneva if they could meet their regional commanders beforehand.
Norwegian peace mediator Eric Solheim said work was being done with both sides "on an hour-to-hour basis to do whatever possible to bring them back to the negotiating table.... and to put a stop to this violence," the AFP news agency reported.
Earlier, S Elilan, the rebels' political leader in Trincomalee district, told the BBC's Tamil service that 27 people had been injured, three critically, in the military bombardment.
The latest violence comes after army chief Lt Gen Sarath Fonseka was seriously injured in Tuesday's suicide blast in Colombo.
The strikes were the first official military action against the Tamil Tigers since a 2002 ceasefire.
The rebels say the strikes were unprovoked, and have warned of retaliation if they continue.
The military said it had resumed air and naval attacks on Tamil Tiger bases around Trincomalee port after its navy ships were attacked.
It said three civilians had been killed and at least 11 people injured - including two navy sailors - when rebels fired mortars into government-held areas. S Elilan denied rebels had opened fire.
Helen Olafsdottir, spokeswoman for the European team monitoring the ceasefire, said the government had closed a road providing the only land link between the south of the country and the rebel-held areas in the north, AP reported.
Escalating violence in the north and east of the country over the past three weeks has targeted Sri Lanka's security forces on a regular basis.
August 2005: Foreign Minister Lakshman Kadirgamar shot dead at his home
July 2004: Woman suicide bomber tries to kill government minister
July 2001: 18 people killed and planes destroyed in attack on Colombo airport
About 100 people have died, some 70 of them soldiers. A number of Tamils have also died in attacks which the rebels blame on the security forces or government-backed paramilitaries.
The rebels have denied being behind recent bomb attacks, although police say Tuesday's explosion at the army headquarters bore all the hallmarks of the Tigers.
It was the first suicide bombing in the Sri Lankan capital since July 2004, and the most serious blamed on the Tamil Tigers since they signed a truce with the government in 2002.
The Tigers began their armed campaign for a separate homeland for the island's Tamil minority in the 1970s.