The troops are pushing the Tigers into a shrinking territory
Sri Lankan troops are advancing on the last town still held by the Tamil Tiger rebels in the north, the military says.
There is intense fighting at the outskirts of the town of Puthukkudiyiruppu, it says.
A senior military officer in the area says this is the "last objective" and that the war could now be over in days. The rebels have made no comment.
Over the past few weeks, the army has driven the Tigers into a shrinking zone of jungle in the north-east.
Meanwhile, TamilNet, the pro-Tamil Tiger website, says at least six people were killed and many others wounded when troops fired a shell near a makeshift hospital at Puthumaaththa'lan.
On Monday the UN and the EU issued fresh appeals for an immediate end to the fighting.
Soldiers are "on the fringes of Puthukkudiyiruppu", defence ministry spokesman Brig Udaya Nanayakkara was quoted by news agency AFP as saying.
The Tigers say they will cease fire but they will not disarm
The defence ministry said that "battlefield reports indicate intense fighting is going on in the area as troops are closing".
Puthukkudiyiruppu is on a narrow strip of land in the north-east still controlled by the Tigers.
The government forces are advancing on the town from the south.
"Troops marching north along the western bank of the Nanthikadal lagoon have breached the earth bund built by the Tigers south of Puthukkudiyiruppu," a defence ministry statement said.
Military officials say this is the last town the Tigers still control - after that there are only a handful of small coastal villages left.
On Monday, Brig Shavendra Silva, the 58 Division commander, told Reuters news agency the town was the "last objective" and that the end of the war could be measured in days, not weeks.
Meanwhile, the military says it is still trying to establish how the rebels managed to buy light aircraft and smuggle them onto the island to establish a rudimentary air force.
Sri Lankan Air Force video shows the moment a Tamil Tiger plane strikes a government building in Colombo
The investigation follows a surprise rebel air attack on the capital on Friday using two Czech-made planes.
One was shot down while the second crashed into a government building and exploded.
"Forensic tests are under way and we have asked the manufacturer about who owned these planes," air force spokesman Janaka Nanayakkara said.
The Tigers have been driven from most of the territory they held by an army offensive in the past few weeks.
But the military says the offensive has slowed because of the presence of tens of thousands of civilians in the area.
Independent journalists cannot travel to the conflict zone so reports from either side cannot be verified.
On Monday, the Tigers told the United Nations they were ready to comply with international calls for a ceasefire with government forces.
But they said they would not lay down their weapons, as the government had demanded.
The government insists that this must happen before the rebels can take part in negotiations.
TamilNet says the deaths at Puthumaaththa'lan were caused by "a single artillery shell fired by troops on Tuesday morning".
Two teenage boys were among the dead, it said. The hospital was treating 98 injured civilians who were admitted on Sunday and Monday, TamilNet said.
About 70,000 people have died in the past 25 years in the Tigers' fight for a separate homeland in the north and east.