The Sri Lanka Monitoring Mission (SLMM) said in a statement on Sunday: "There has been a dangerous escalation of violence taking place over the last couple of weeks. This trend is extremely worrying.
"Both sides have shown lack of commitment and their actions have been provocative and not in line with the spirit of the ceasefire agreement."
The SLMM also said it had not ruled out rebel involvement in an attack on Saturday which left eight Sri Lankan sailors presumably dead at sea.
Military officials say six Tamil Tigers smuggling weapons blew up their trawler to avoid capture and sank an approaching Sri Lankan patrol boat.
It was the worst incident since the government and Liberation Tigers of Tamil Eelam (LTTE) held peace talks in Geneva last month.
A second round next month is seen as vital to uphold the truce and avoid a return to war.
Search teams were still scouring the sea off the northwestern district of Puttalam for the eight missing sailors after the worst incident at sea since suspected rebels blew up a similar navy patrol boat in January.
However, military officials said hopes of finding anyone alive after Saturday's blast had faded.
The Tigers denied any involvement in the incident, which follows another last month off the northeast coast, in which the navy said four suspected rebels and one sailor were killed after a trawler was blown up.