The Sri Lankan army and Tamil Tiger rebels have clashed in the north of the island with many fighters killed, both sides say.
The Tigers are fighting for an independent Tamil homeland
A senior defence ministry official said mortar and artillery fire had killed at least 20 rebels around the Omanthai checkpoint in Vavuniya district.
A rebel spokesman denied the claim. He said the guerrillas ambushed army soldiers and killed 10 of them.
Some 4,000 people have been killed in escalating violence since late 2005.
"There was mortar fire to the forward defence line in [the north], which killed one soldier and wounded four," Lt-Col Upali Rajapakse, a spokesman for the defence ministry, was quoted by news agency Reuters as saying.
"We have retaliated and their communications prove at least 20 [rebels have been] killed," he said.
The Tiger's military spokesman, Rasiah Ilanthiraiyan, denied any casualties on their side.
He said the Tigers had killed 10 government soldiers who had launched a small attack in Vavuniya district.
Mr Ilanthiraiyan was quoted by news agency AFP as saying: "We have the bodies [of the killed soldiers]."
Both the Tigers and the military are, officially, still observing a 2002 ceasefire which has become meaningless in practice.
Violence began to increase after the 2005 election of President Mahinda Rajapakse.
Some 4,000 people have died since then and thousands have been displaced by the fighting.
Human rights groups have expressed grave concern for the plight of displaced civilians and the United Nations has warned of impending food shortages for the homeless.
The Tigers are fighting for a Tamil homeland in the north and east of the island.