The defence ministry reported that nearly 50 soldiers were killed and 400 wounded in the offensive.
However, it said the Tamil Tigers' losses had been much higher.
"Intercepts of terrorist radio communications confirmed they lost 116 of their cadres," a defence ministry spokesman said.
The Tigers themselves say they have lost only 19 fighters.
The government's offensive - codenamed Ranagosa (Operation Battle Cry) - was launched on Sunday in the northern Mannar district after a lull of two months.
Defence line
The latest army operation is intended to expand the area held by the security forces by straightening a defence line in Mannar.
So far this year the army says it has captured 1,500 square kilometres of territory mostly meeting little resistance.
However, the Tigers have been fighting back in one area.
The renewed fighting came just two days after a temporary truce called by both sides to allow the UN to carry out polio immunisation.
The immunisation campaign ended on Saturday.
Plans to end the fighting appear to be making little progress.
Efforts to persuade the ruling alliance and the opposition to agree on a bipartisan approach to peace have made no headway - despite attempts by Sri Lanka's business community to inject more urgency into the process.
It is not known what has happened to the government's devolution package to grant limited autonomy to the north and east of Sri Lanka.
The Tamil Tigers are fighting for independence in the north and east.
Country profiles
Sri Lanka militia leader killed
(02 Sep 99 | South Asia)
Sri Lanka navy sinks Tiger boats
(16 Aug 99 | South Asia)
Sri Lankan call for unified peace effort
(12 Aug 99 | South Asia)
Nine dead in Sri Lanka blast
(11 Aug 99 | South Asia)
Sri Lanka: Searching for a solution
(04 Aug 99 | South Asia)
Funeral for Tamil peacemaker
(31 Jul 99 | South Asia)
Chronology of the Tamil conflict
(28 Jan 98 | Sri Lanka)
Sri Lankan Government Information Department
Tamilnet
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