* Tamil Tigers concede defeat in 25-year war
* Military says rescues all civilians from war zone
* Minor fighting still ongoing-military
By C. Bryson Hull and Ranga Sirilal
COLOMBO, May 17 (Reuters) - Sri Lanka’s relentless military offensive drove the Tamil Tiger separatists on Sunday to admit defeat in a quarter-century conflict seen as one of the world’s most intractable wars.
The Liberation Tigers of Tamil Eelam (LTTE) conceded the war hours after they sent out suicide attackers as part of a last-ditch fight to fend off the military’s final assault on the sole square kilometre (0.5 sq mile) they controlled.
“This battle has reached its bitter end,” the LTTE’s diplomatic chief, Selvarajah Pathmanathan, said in a statement posted on the pro-rebel web site www.TamilNet.com. “We have decided to silence our guns.”
President Mahinda Rajapaksa had declared victory on Saturday after troops seized the entire coast for the first time since the war erupted in 1983, even as the climactic battle raged in the sandy patch where the LTTE was dug in for a last stand.
Rajapaksa was due to make a formal victory announcement in parliament on Tuesday morning, but already flags were flying, and people danced and lit fireworks in celebration.
Even though there has been little doubt for months about who would win Asia’s longest modern war, sporadic battles were still being fought late on Sunday and no one was willing to predict when the last bullet would be fired. [ID:nCOL472512]
“We are doing the mopping-up operations,” military spokesman Brigadier Udaya Nanayakkara said. Earlier, he said: “Suicide cadres are coming in front of troops in the frontline and exploding themselves.”
The final battle picked up speed after the last of 72,000 civilians who have fled over four days were freed, the military said.
The United Nations and others say the Tigers had been holding them as human shields, and warned that they were at grave risk.
Getting an independent picture of events in the war zone is normally a difficult task, given both sides have repeatedly distorted accounts to suit their side of the story and outside observers are generally barred from it.
LTTE founder Vellupillai Prabhakaran’s fate stayed a mystery. Military sources said a body thought to be his was found.
“They are taking the body for checks to confirm it is the real Prabhakaran,” a military official told Reuters on condition of anonymity. Four other military sources confirmed the account, which Nanayakkara denied.
Prabhakaran singlemindedly built the LTTE into one of the world’s most violent armed groups through hundreds of suicide bombings and assassinations, which earned it a terrorist designation in more than 30 nations.
He had long vowed not to be taken alive, and ordered followers to bite cyanide capsules if they were captured.
In less than three years, Sri Lanka’s bulked-up military has answered critics who said there was no way to defeat the LTTE, which had carefully crafted an aura of military invincibility.
Troops have seized 15,000 sq km from the LTTE, which it had ruled as a de facto state for Sri Lanka’s Tamil minority and guarded with a standing army, naval wing and even a small air force. The LTTE had called it Tamil Eelam.
The cataclysmic end to the war came after the government rejected calls for a truce to protect civilians, and the Tigers refused to surrender and free 50,000-100,000 people the United Nations and others said they had been holding as human shields.
Each side accuses the other of killing civilians, and diplomats say there is evidence both have done so. The U.N. rights chief on Friday said she backed an inquiry into potential war crimes and humanitarian violations by both sides.
Pathmanathan, who is wanted by Interpol and was for years the LTTE’s chief weapons smuggler, said 3,000 people lay dead and 25,000 more were wounded.
Former Sri Lanka peace mediator Norway on Sunday said the LTTE had finally agreed to hand over weapons to a third party, something Sri Lanka had ruled out long ago. [ID:nCOL464919]
A wave of diplomatic pressure from the United States, Britain, France and the United Nations last week, including threats to delay a $1.9 billion International Monetary Fund (IMF) loan, appeared to come too late to stop the final fight.
Sri Lanka's $40 billion economy is struggling with depleted foreign exchange reserves, shrinking export revenues for tea and garments, rising import costs, a declining rupee currency LKR= and a balance of payments crisis.
Rajapaksa’s government is counting on victory to help boost the economy and win him another term in power.
The Tigers have warned that their conventional defeat will usher in a new phase of guerrilla conflict targeting Sri Lanka’s economy, an indirect threat to a tourism sector the government hopes can be boosted after the war.
Rajapaksa kissed the ground after he returned home early on Sunday from an official visit to Jordan, state TV showed.
The Tigers have answered earlier battlefield losses with suicide bombings in the capital, Colombo.
Prabhakaran began his fight for a separate state for Sri Lanka’s minority Tamils in the early 1970s, and it erupted into a full-scale civil war in 1983 that has killed at least 70,000.
Tamils complain of marginalisation at the hands of successive governments led by the Sinhalese majority, which came to power at independence in 1948 and took the favoured position the Tamils had enjoyed under the British colonial government.