The army said two people were killed in a crossfire in the northeast of the country on Tuesday when a fragmentation mine ambush injured 12 members of the Sri Lankan navy.
An army spokesman said a Claymore mine had hit a navy bus near the northeastern port of Trincomalee. Suspected rebels then fired on the military, who retaliated.
Brigadier Athula Jayawardane, the head of military operations, said: "There were two civilian fatalities." He said that 12 sailors were wounded, of whom six had "moderately severe" injuries.
Several suspected rebel attacks with Claymore mines have killed dozens of troops in the last month and strained a 2002 ceasefire between the government and the Tigers to breaking point.
A Claymore mine is a vicious weapon involving a block of plastic explosives that fires out steel ball bearings at a steep angle over a distance of 100 metres. It is often used in ambushes.