Officials announced to the local fishing communities on Sunday that fishing just outside the port of Trincomalee was limited to daytime after Saturday's pre-dawn attack carried by an explosives-laden boat within a fishing flotilla.
There was no immediate reaction from the Liberation Tigers of Tamil Eelam (LTTE) to the military's allegations, but the guerrillas accused the navy of preventing Tamil fishermen from earning a living by banning fishing.
"The Sri Lankan Navy has banned fishing for Tamil fisherman in most sections of the north seas of the Jaffna peninsula," the LTTE said in a statement posted on its peace secretariat website.
The Tigers said nearly 1000 families had been affected but the navy said the restriction applied only to night fishing.
Navy officials quoted two sailors who jumped into the water just before their Dvora gunboat was blown up as saying that a small craft that mingled with a flotilla of fishing boats had carried out the attack.
"The craft was about 30 metres away when the sailors noticed it making a dash for the gunboat," a navy source said.
"A search is under way but we have not been able to locate any wreckage"
A defence ministry spokesman
The two sailors were rescued by fishermen but the other 15 crewmen are missing presumed dead.
Naval craft were also looking for the wreckage of the Israeli-built gunboat that was sunk and brought the biggest loss to the military since a truce in 2002.
"A search is under way but we have not been able to locate any wreckage," a defence ministry spokesman said.
"We had some reports that a few bodies [of sailors] had been found by fishermen, but the navy could not confirm it."
Mahinda Rajapakse, the president of Sri Lanka, was in talks with military commanders on Saturday and called for restraint while taking precautions to prevent further rebel attacks.
Norway is sending Erik Solheim, its international development minister, later this month to try to revive talks between the two parties to save the Oslo-brokered ceasefire.
President Rajapakse has called
Separatist Tiger guerrillas are known to have carried out suicide attacks against dozens of naval craft in the past.
Saturday's strike was the first sinking of a high-powered naval gunboat since the truce.
Mangala Samaraweera, the Sri Lankan foreign minister, who is visiting Washington, appealed for international pressure to be applied to the Tigers to bring them back to the negotiating table in an attempt to end the conflict that has claimed more than 60,000 lives since 1972.