COLOMBO – Thousands of civilians under rebel fire waded across a lagoon to escape Sri Lanka's war zone, where government forces have surrounded Tamil Tiger separatists for the final battle of a 25-year conflict, the military and a U.N. official said.

The military said aerial surveillance footage confirmed an exodus of around 5,000 people from a tiny, sandy coastal strip, where the United States and others say the Liberation Tigers of Tamil Eelam (LTTE) are holding thousands by force.

Sri Lanka and the LTTE on Thursday brushed off demands from the U.N. Security Council and U.S. President Barack Obama to take steps to protect the civilians at grave risk stuck between two foes determined to fight to the end of a war that began in 1983.

The call appeared to have come too late to stop an exodus the military has been counting on to remove the only protection the LTTE has from a military onslaught of overwhelming force.

Already, 2,000 civilians have crossed the lagoon. There is a large number of people crossing, and the (rebels) fired at them, Four people were killed, 14 were wounded, said military spokesman Brigadier Udaya Nanayakkara.

By evening, there were 2,700 people checked and cleared and at least another 1,000 waiting, although darkness had made it difficult to tell, he said.

Earlier, the United Nations' acting representative for Sri Lanka, Amin Awad, told Reuters that local sources in the combat zone said up to 6,000 had escaped or were attempting to do so.

They are trying to escape, but the LTTE is firing at them, overhead and into them. The army and the navy claimed to have rescued some, and we are concerned about those remaining, said Awad, who is also head of the U.N. refugee agency UNHCR.

Helicopters airlifted 12 wounded people for treatment, air force spokesman Wing Commander Janaka Nanayakkara said.

CLINIC CLOSES

Government doctors whose personal security is at the whim of the Tigers said constant shelling had prompted them to give up work at the only clinic left in the war zone, where 2,000 patients needed treatment.

The medical staff has stopped our service as we are unable to work without a safe environment. We have informed this to U.N. and (Red Cross), Dr. T. Sathyamoorthy said by telephone. The government says he and his colleagues are in the LTTE's thrall.

Getting a clear picture of the battlefield is nearly impossible, since most outsiders are barred from it and both sides have repeatedly distorted accounts of events there to suit their version of the story.

The Security Council and Obama on Wednesday urged the LTTE to surrender and free tens of thousands of civilians they are holding, and the military to stop shelling people and refrain from using heavy weapons.

The International Committee of the Red Cross (ICRC) said fighting on Thursday had blocked it for a third day from offloading relief supplies and ferrying out wounded people.

Reports that hundreds were killed in attacks on a makeshift clinic in the 2.5 square km (1 mile) area of remaining LTTE territory, for which both sides blamed each other, prompted the Security Council to make its first formal statement this year.

Sri Lanka on Thursday again ruled out any truce and said troops were only using small arms while trying to free civilians. It applauded the council's recognition of its right to combat terrorism on its own soil.

When the LTTE lays down arms and surrenders, there will be no need of conducting operations to free the civilians, Mahinda Samarasinghe, disaster management and human rights minister, told Reuters.

The Tigers' political head, B. Nadesan, in a statement said the LTTE supported a permanent ceasefire but ruled out laying down arms, which he called a protective shield.

Tamils earnestly look forward to President Barack Obama to lead the humanitarian intervention, he said, accusing the United Nations of holding back in bringing about a truce.

He made no reference to Obama's statement that called the LTTE's use of civilians as forced recruits and human shields deplorable nor the call to lay down arms.

The Tigers, on U.S., EU, Canadian and Indian terrorist lists, have vowed no surrender in their fight for a separate nation for Sri Lankan minority Tamils, which began in the 1970s and erupted into full-scale civil war in 1983.

Their fighters carry out suicide attacks and are reported to wear cyanide capsules to take in case of capture.

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