(Updates naval battle) By Ranga Sirilal COLOMBO, Sept 18 (Reuters) - Sri Lanka's navy killed at least 25 Tamil Tiger rebels and destroyed 10 boats as some of the bloodiest fighting in months raged into a second day on Thursday, the military said. The sea battle took place off the fishing port of Nachikkudah, where fighting a day earlier had killed 40 Liberation Tigers of Tamil Eelam (LTTE) rebels and 10 soldiers. In all, at least 71 people were killed on Wednesday, one of the deadliest days of combat since Sri Lanka's armed forces intensified a thrust into rebel-held territory three months ago. There was no independent confirmation of the casualties and the rebels could not be reached for comment. The battle for Nachikkudah, about 300 km (185 miles) north of the capital Colombo, went offshore on Thursday. A navy spokesman said the sea battle lasted about 4-½ hours and involved naval vessels and about 20 LTTE boats. Seven small attack boats and three large ones were destroyed, and another four vessels were damaged and retreated, the spokesman said. At least 25 rebels were killed, he added. Nachikkudah has been the scene of heavy fighting for weeks, with ground troops pushing forward and air force jets hitting LTTE bunkers and outposts with almost daily strikes. "Heavy fighting occurred throughout the day on Wednesday and the troops managed to successfully secure an area of 1.5 km of the LTTE's Nachikkudah forward defence line," military spokesman Brigadier Udaya Nanayakkara said. The rebels' Nachikkudah defences protect the southern flank of Poonaryn, a strategically important spit of land on which the LTTE has artillery batteries that in the past have inflicted heavy casualties on troops crossing the narrow Jaffna Peninsula. Were the military to break through the Jaffna line and push down through the heavily mined area, it would be able to strike the LTTE from the north while it hits them on four fronts from the south. Lieutenant-General Sarath Fonseka, the army commander, told Reuters on Thursday that the rebels this week had used a form of tear gas on soldiers, but that it was a minor problem since most frontline troops have gas masks. On Tuesday the military said they were within 5.5 km (3 miles) of Kilinochchi town, the LTTE's de facto capital and a prized target for Sri Lanka's military as it tries to wipe out a foe it has battled since 1983. Pro-rebel website www.tamilnet.com, quoting unidentified LTTE police, said a military claymore fragmentation mine had killed three people riding a bus in Kilinochchi district on Thursday. The Tigers want to establish a separate homeland for Sri Lanka's ethnic minority Tamils, in a nation that has been ruled by majority Sinhala-led governments since independence from Britain in 1948. (Writing by Bryson Hull; Editing by Jeremy Laurence)
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