The fighters from the Liberation Tigers of Tamil Eelam (LTTE), were killed early on Tuesday during an attack on their camp in the Batticaloa district, General Nihal Karunaratne, a police deputy inspector, and a spokesman for the renegade Karuna group said.
The LTTE said only one fighter died and blamed the army for the deaths.
Fighters loyal to the eastern commander of the Tigers, Karuna Amman, have clashed with the LTTE in the east of the country since 2004. The government and Karuna deny any links but diplomats and analysts believe they are supporting each other.
The Karuna warned there would be more attacks against the Tigers, who they accuse of ignoring eastern Tamils.
"Wherever their camps are, we will search and attack them," said Karuna group spokesman Thuyawan. "We know the Tiger strategy because we were once part of the Tigers."
In a separate incident a Sri Lankan soldier was shot dead in the district of Trincomalee, a military spokesman said.
Mahinda Rajapakse, the Sri Lankan president, has paid his last respects to Major-General Parami Kulatunga, who was killed by a suicide bomber on Monday.
Nordic truce monitors have not yet ruled who was to blame for the attack on Sri Lanka's third highest ranking officer, but are in little doubt.
Sri Lanka's president pay his last
respects to a murdered general
"It was obviously a well-planned attack. It indicates that it was the Tamil Tigers," said Thorfinnur Omarsson, spokesman for the unarmed Sri Lanka Monitoring Mission.
"It was the same kind of method they have used previously."
The Tigers have denied killing the general outside the capital, Colombo.
Rajapakse has urged calm following the attacks and said his government would "act with patience".
The military set up new roadblocks on Tuesday in the capital as security was stepped up to prevent further attacks.
A wave of violence on the island has killed around 700 people so far this year, increasing fears of a renewed civil war.
The Tigers fought for nearly two decades to create out a separate homeland for the country's minority ethnic Tamils, who are mostly Hindu, claiming discrimination by the mainly Buddhist Sinhalese majority.
A Norway-brokered truce halted the fighting in 2002 but has virtually fallen apart in recent months.