C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001143

SIPDIS

DEPARTMENT FOR SA, SA/INS; NSC FOR E. MILLARD

E.O. 12958: DECL: 07-01-13
TAGS: PREL PTER PINS NO JA CE LTTE
SUBJECT: Sri Lanka: Peace process poised to enter new
phase

Refs: (A) Oslo 1298, and previous

(B) Colombo 1121, and previous (notal)

(U) Classified by Donald Camp, Charge d'Affaires.
Reasons 1.5 (b, d).


1. (C) SUMMARY: With the prime minister back from a
successful visit to the United Kingdom, Sri Lanka's
peace process is on the verge of entering a new phase.
The Tigers are hinting at a return to talks, while the
government is preparing an interim administration
proposal. The Liberation Tigers' of Tamil Eelam
(LTTE's) political leader Thamilchelvam told the
Japanese ambassador on June 30 that the LTTE sought to
respond positively. These developments, however, take
place in an atmosphere of continued Tiger violence and
tension in the south. END SUMMARY.

POSITIVE TIGER HINTS
--------------


2. (C) Recent actions by the Tigers continue to
indicate a possible thaw in their hardline stance
towards the government's efforts to resume peace
negotiations. As previously reported, June 23 comments
by LTTE theoretician Anton Balasingham about a possible
resumption of talks followed his London meeting -- the
first since Tokyo -- with Norwegian facilitators. Since
then, the Tigers have continued to reach out to the
international community, finally accepting a Japanese
offer to brief them on the Tokyo conference. (Note:
Efforts by the Japanese to visit both the Tigers in the
Wanni and Balasingham in London immediately following
the June 9-10 conference were spurned as the group
continued its hardline stance.) On June 30, the
Japanese ambassador traveled to the Wanni for a meeting
with LTTE political leader S.P. Thamilchelvam.
Afterwards, Japanese Embassy contacts described the
meeting to poloff as "cordial and constructive." They
said Thamilchelvam seemed intent on waiting for the next
GSL proposal before agreeing to talks, but that the LTTE
was seeking to respond positively. When contacted, a
Tamil National Alliance (TNA) parliamentarian in the

east, Joseph Pararajasingham, told us that he too felt
hopeful about the current situation.


3. (C) Meanwhile, the June 27 LTTE-sponsored Pongu
Tamil ("Rising Tamil") rally in Jaffna reportedly had
fewer participants than originally forecast. Embassy
contacts described the event as "placid." Speakers
reportedly made no reference to the stalled peace talks.

GSL DELIBERATE RE NEXT STEPS
--------------


4. (C) In the wake of the prime minister's recent trip
to London (June 22-30), the government is drafting a
proposal for an interim administration. While in
London, the PM and his delegation reportedly consulted
with senior British government officials on the legal
challenges facing Sri Lanka's reconstruction efforts.
Key government minister G.L. Peiris at a June 26
briefing stated the GSL would be offering a new draft
proposal by mid-July. In a follow-up comment to poloff,
Peiris stressed the proposal was merely the next step of
an ongoing process, but one that would require careful
deliberation. The GSL's conduct suggests it is putting
more work into this current proposal for an interim
administration than in previous drafts. (Note: In the
lead-up to the early June Tokyo donors conference, the
GSL offered draft administration proposals almost daily
to the Tigers, who rejected them almost as quickly.)
TNA member Pararajasingham said he expected a favorable
Tiger response to the GSL's draft proposal.

NORWEGIANS REGROUP
--------------


5. (C) In a good sign from the peace process
facilitators, Norwegian polchief Tomas Stangeland
confirmed that former ambassador Jon Westborg has just
returned to Sri Lanka as a special envoy to shepherd the
peace process while the current ambassador, Hans
Brattskar, is out of the country for several weeks.
Norwegians and LTTE reports speculate that the
Norwegians could schedule a GSL-Tiger meeting sometime
in August or September, with Switzerland as a possible
venue.

LTTE-INVOLVED KILLINGS CONTINUE
--------------


6. (C) Meanwhile, tensions in the South and the Tamil
community continued to mount over increased LTTE
violence. The Tigers are alleged to be responsible for
the killing of a former member of an anti-LTTE political
party on June 27, in addition to an unsuccessful attempt
to storm a prison and release a fellow cadre detained on
murder charges. Both incidents took place in the east.
(Note: These incidents follow the previously reported
killings of a highly-respected counterterrorism police
officer in Colombo on June 23 and an anti-LTTE Tamil
politician in Jaffna on June 14, both with the hallmarks
of a Tiger hit.) Opposition Leader Mahinda Rajapakse
and key presidental confidant Lakshman Kadirgamar called
attention to these killings during conversations with
Charge on June 26 and 27. Both men spoke of their
growing distrust for the Tigers, even as they stressed
that no one supported a return to violence.


7. (C) The tension continued as increased security in
Colombo was apparent over the June 28-29 weekend. While
press reports detailed the detention of "hundreds of
Tamils," police contacts have told us that most have
been released, with only a small number of individuals
being held for interrogation. Interior Minister John
Amaratunga, during a June 30 meeting with Charge,
characterized the Tiger activity as "isolated
incidents," and said that increased security measures
were temporary.

MONITORING MISSION REPORTS ON SHIP SINKING
--------------


8. (C) The Norwegian-led Sri Lanka Monitoring Mission
(SLMM) on June 27 released its report on the June 14
sinking of a suspected LTTE arms vessel off Mullativu.
The SLMM said that neither party violated the ceasefire
agreement and the GSL was within its rights in
challenging the ship. It said the LTTE ship was in
violation of the United Nations Convention on the Law of
the Sea by not flying "an appropriate flag, and
official, visible identification." The report urges
both parties to contact the SLMM more promptly in the
future, and lays the burden of reaching an agreement
preventing future sea clashes "as soon as possible" on
the GSL and LTTE. Both sides have received the report
without comment, with the entire SLMM report being
posted on the pro-LTTE website, TamilNet.

COMMENT
--------------


9. (C) The recent comments by both the GSL and the
Tigers point to positive signs on the surface for a
resumption of peace process talks. Underneath, however,
the Tigers' continued violence and the government's
security measures indicate each are wary of being too
optimistic. Despite all the undercurrents, the prospect
for restarting face-to-face negotiations is the most
hopeful since the early June conference in Tokyo. END
COMMENT.

CAMP