The army took the rebel-held town of Kilinochchi last Friday
Sri Lankan troops say they have taken the northern-most defensive line of Tamil Tiger rebels in Jaffna peninsula.
The army says troops seized the line at Muhamalai, a day after reaching the southern outskirts of the strategic mainland link, Elephant Pass.
The government says that it soon hopes to capture the north from the rebels.
The Tigers say 41 soldiers were killed and 102 wounded in fighting on Tuesday. There is no independent confirmation of either sides' claims.
The Tamil Tigers say that arms and ammunition were also captured as rebels halted the army offensive. The government says the rebel figures are "inflated" and that "scores" of rebels have been killed.
Independent journalists are prevented by the government from travelling to the area. Both sides have in the past been accused of exaggerating the other's casualties.
The Tiger's political head, B Nadesan, earlier dismissed the fall of the town of Kilinochchi last week as "an insignificant setback in the context of a liberation struggle".
The town was the rebels' administrative and political centre.
"Kilinochchi town was captured more than once by the Sri Lanka military earlier. Similarly, we have also recaptured the town on earlier occasions," Mr Nadesan said in an interview with the pro-rebel TamilNet website on Monday.
The BBC's Roland Buerk in Colombo says the loss of their front line on the Jaffna peninsula is another blow for the Tigers, who are being harried by the government's offensive.
The military's spokesman, Brig Udaya Nanayakkara, said soldiers had advanced 600 metres at the village of Muhamalai as the rebels fell back.
Troops have been moving north towards Elephant Pass
"The terrorists were caught in total disarray following concentrated armour and infantry assaults backed by heavy artillery attacks which left scores of terrorists killed and many others wounded," the Sri Lankan defence ministry said.
"According to military sources... troops have seized control over the entire rebel defence line, north of A9 (main road), while fighting still continues in the remaining Tiger positions, south of the A9," it said.
In recent years the Tigers set up a de facto state in the north of Sri Lanka, squeezed between government-controlled Jaffna in the far north and the rest of the country to the south.
A major military offensive has advanced rapidly from the south, forcing the rebels to give up much of their territory.
But our correspondent says that until now, soldiers in Jaffna have been unable to break through the peninsula to open another front in the fight.
After taking Kilinochchi the government is confident of swift victory in the war. It has said that the Tigers would be "cleared" from the north in the coming weeks.
Tamil Tiger rebels have been fighting for a separate homeland for the island's ethnic Tamil minority for the past 25 years. At least 70,000 people have been killed in the conflict.