India aid sends all clear for Sri Lanka war-analysts

By C. Bryson Hull

COLOMBO, Nov. 20 (Reuters) - India handed over aid for Sri Lanka's war refugees on Thursday in what analysts say is the clearest sign yet New Delhi will not interfere with Colombo's plan to end Asia's oldest insurgency militarily.

India's ambassador to Sri Lanka handed over at a ceremony more than 1,680 tonnes of relief items to the International Committee of the Red Cross, which will deliver it to an estimated 200,000 people displaced by the war in northern Sri Lanka.

It is a far cry from a 1987 airdrop of aid by the Indian air force which signalled the start of India's 3-year direct intervention in a war that has always roiled politics there and kept Sri Lankan leaders mindful of their giant neighbour.

Sri Lankan President Mahinda Rajapaksa's government has made the most battlefield progress against the separatist Liberation Tigers of Tamil Eelam (LTTE) of any since the war began in 1983.

That has fuelled talk he will call an early election to capitalise on the military success to consolidate his power, especially with the economy under pressure from the cost of the war, expensive debt and declining prices for major exports.

Facing an election at home before May and pressure from Tamil political partners in his coalition over the war, Indian Prime Minister Manmohan Singh last month criticised the escalation of the war and urged a political solution to Tamil grievances.

That set off a flurry of shuttle diplomacy resulting in the aid shipment and a statement in which India agreed the LTTE -- on U.S., Europe and Indian terrorism lists -- must be dealt with militarily, and Sri Lanka promised to push political negotiations.

The aid shipment shows how India's dual policy of wanting the Tigers destroyed as a military threat while ensuring innocent Tamils are treated fairly is still on track, said Reva Bhalla, an analyst with U.S. private intelligence firm Stratfor.