Tens of thousands of civilians are still believed to be trapped
India has said it ready to help in the evacuation of tens of thousands of civilians caught up in the fighting in Sri Lanka.
Foreign Minister Pranab Mukherjee also told parliament the Tamil Tiger rebels had "done much damage" to the Tamil community and should lay down arms.
The UN and Red Cross have expressed deep concern for the trapped civilians.
The Sri Lankan navy has escorted a new convoy of food to the area but it is only a fraction of what is needed.
Meanhwile, the defence ministry says the army is continuing to take rebel areas in the shrinking zone the Tigers control and the government has again ruled out a ceasefire.
Pro-rebel sources on Wednesday accused the air force of killing 100 civilians in a cluster bomb attack.
No independent journalists can reach the conflict zone so claims by either side cannot be independently verified.
In his statement to the Indian parliament, Mr Mukherjee said the plight of about 70,000 trapped civilians was a "serious source of concern to us".
He said India was "actively engaged to prevent a further deterioration of humanitarian conditions" and had sent relief supplies to civilians.
Mr Mukherjee added: "The government of India is ready to facilitate the evacuation of civilians trapped in the area of conflict, working with the government of Sri Lanka and the International Committee of the Red Cross, who would take responsibility for the security, screening and rehabilitation."
Sri Lankan defence spokesman Keheliya Rambukwella said that it welcomed the offer from India "provided it is done within the framework the we have set up already".
Mr Mukherjee said India continued to back "a negotiated political settlement" but that the Liberation Tigers of Tamil Eelam (LTTE) remained "a proscribed organisation in India [that] has done much damage to the Tamil community".
His comments sparked anger among MPs of two regional parties from India's Tamil Nadu state and the uproar forced two adjournments.
There are about 62m Tamils in the state and they have close links to Sri Lanka.
The Sri Lankan military has made steady inroads into rebel positions
In the 1980s India sent troops to enforce a peace deal but they ended up fighting the Tigers and were withdrawn in 1990.
Concerns for civilians has led to a new convoy of food aid being sent by sea.
About 30 tonnes of rations were despatched, accompanied by Sri Lankan navy vessels.
However aid workers say civilians are facing severe shortages of food, medicine and clean water and that a minimum of of 2,500 tonnes of food a month are needed.
Meanwhile the government has again rejected calls for a ceasefire.
The Tamil National Alliance, which has 21 MPs in parliament, made the call but Mr Rambukwella said: "We have taken a policy decision to completely root out terrorism. There will be no ceasefire with the LTTE."
The army said it had captured another rebel village and recovered 28 rebel bodies since Monday amid heavy clashes.
On Wednesday, a regional health official, Dr Thurairaja Varatharajah, told Associated Press at least 38 civilians had been killed in government artillery attacks and air raids.
And the rebels accused the air force of killing 100 civilians and injuring another 70 with cluster bomb attacks on Aananthapuram. Mr Rambukwella denied the accusation.
The rebels' political chief B Nadesan also denied UN allegations that the Tigers were stepping up the forcible recruitment of child soldiers.
"We categorically deny the recruitment of anyone below an 18-year limit," he told the pro-rebel TamilNet website.
He also said criticised the UN for "not taking effective measures to protect the life, security and interests of innocent Tamil civilians".
"Instead, the UN is engaged in fruitless exercises of accusing the wrong side."
About 50,000 soldiers are pressing the Tamil Tigers into a patch of north-eastern jungle after taking the key areas of Kilinochchi, Elephant Pass and Mullaitivu.
The Tigers have been fighting for a separate homeland in the north and east for a quarter of a century.