"Fighting began again a short while ago about 16 km north of Valaichchenai," said Agnes Bragadottir, spokesperson for the Sri Lanka Monitoring Mission, referring to a town in the eastern district of Batticaloa, about 220km east of Colombo.
North of Valaichchenai is also the same area where about 3000 civilians who fled fighting on Friday were taking refuge.
Reports on Friday said eight fighters and an ambulance driver had died in the clashes, but a spokesman for breakaway eastern commander Karuna said there were 10 dead on their side and officials said the main Tiger group could have lost 15 to 20 fighters.
A Defence Ministry statement said there had been "several casualties" and added that, although the fighting had not drawn in government forces, it considered the clashes to be a violation of the Norwegian-brokered truce.
The defence secretary told Reuters the president would meet the Norwegian ambassador on Saturday to discuss a situation that complicates her newly elected government's efforts to revive peace talks, on hold now since April 2003.
The Tamil Tigers are known to
brook no dissent
President Chandrika Kumaratunga told US Secretary of State Colin Powell she would move to restart talks after next week's local New Year holidays and would not let the split in the Tigers stand in the way, but it is difficult to see how that would work in practice.
The Tigers consider themselves the sole representatives of the Tamil people and, when Karuna - the nom de guerre for eastern rebel commander V Muralitharan - broke from the group in early March, it was a major blow to their internal discipline.
The Tigers, who have been fighting for a separate Tamil state, are known to brook no dissent and have vowed to "get rid of Karuna from our soil".
Kumaratunga, an arch-foe of the Tigers whom they tried to kill in a 1999 suicide bomb attack, was expected to retain the defence portfolio when the island's new cabinet is sworn in later on Saturday.