This was the first time representatives of the two sides had sat down together since the current round of conflict erupted back in August, shredding a 2002 ceasefire.
About 1,000 have died in fighting since then - all sides have different claims - making more than 65,000 since the conflict began, back in 1983.
Yet with peace talks in Geneva ending with the sides still apparently far apart, the future does not look good to many Sri Lankans.
"We all wanted something to come out of the talks," said Sunil Kotawala, a restaurateur in Galle. "Even though there have been plenty of such talks before."
For many people in Galle, hopes for peace had been high too because two weeks ago, the town's naval facility suffered a suicide attack by "Sea Tiger" boats.
The defence ministry said 15 fighters and a navy sailor were killed in the ensuing gun battle, with locals frightened as news spread that some of the Tigers might have escaped into the town.
"It was very scary, and unexpected, as things are usually peaceful here," said Kotawala's neighbour, EG Premawanthia, who runs a repair shop for the three-wheeler scooter taxis that are ubiquitous around Sri Lanka.
"Something like that happens and it hits all of us. Hotels most of all - the tourists won't come if there are bombs."
Many in this picturesque and historic town depend on the tourist trade for their livelihoods.
The navy has been engaged in
frequent clashes with the Tigers
JV Pramavanthiya, a teacher, said: "People are sick of war. It's just a minority on both sides who benefit. When you get people together - Sinhalese, Tamils - nobody really has any problem. So why do they, at the top?"
According to Jehan Perera, an analyst at the country's leading business magazine, LMD, the talks failed as both sides - the government and the Liberation Tigers of Tamil Eelam (LTTE) - stuck rigidly to different topics of discussion.
"It seems the government side wanted to talk about political solutions - democracy, federalism, the future of the country," he says. "But the LTTE wanted to talk only about one humanitarian issue, the reopening of the A9 highway."
This road links Colombo with the northern city of Jaffna, via LTTE-controlled territory.
The government closed the road when the present hostilities began in August, saying that it would be used to supply the LTTE and also for the Tigers to extract "taxes" from passing vehicles.
The LTTE says it wants the road open for humanitarian reasons, as its territory is now home to thousands of refugees, fleeing the fighting. Without the road, supplies of food and fuel for these people are reportedly running short.
Perera said: "At the same time, I suspect the LTTE doesn't want to talk about political solutions at this stage because they ultimately want an independent Tamil homeland and don't want to get locked into a discussion about a federal solution to the problem."
Fighting continued unabated during the talks, which took place over the weekend under Norwegian auspices.
Government security sources reported two soldiers shot dead by the Tigers on Saturday afternoon in Mirusuvil, Jaffna, and one more near Batticaloa. The security forces also reported that in Idupiddy five Tamil civilians had been killed by the premature explosion of a suicide bomb fitted to a bicycle.
Finally, in the early hours of Monday morning, citizens of Jaffna were wakened by an artillery duel between government forces in and around the town and Tiger forces to the south.
Paikiasothy Saravanamuttu , an analyst with the Colombo-based Centre for Policy Alternatives, said: "The two sides went to Geneva largely to appease the international community.
"They wanted to pre-empt the international community getting frustrated and losing interest in Sri Lanka. Neither side was seriously interested in negotiating anything."
Many feel that this was because both sides think they can score a military success, altering the balance of power on the island in their favour.
At present, the Tigers control the northern province known as the Vanni, and part of the eastern coastline - two Tamil-majority areas.
Schools in Vakaria have been
taken over by refugees
However, some Tamil Tigers have broken from the LTTE and joined the eastern-based Tamil People's Liberation Tigers (TPLT) around a former LTTE commander, Vinayagamoorthi Muralitharan, known as Karuna.
The LTTE has also been fighting the TPLT, which many claim is being supported by the security forces.
The east is also home to many of the country's Muslim minority, who have often been caught in the crossfire.
The rest of the island, which has a Sinhalese majority, is under government control.
"The next bout of fighting is now due," Saravanamuttu said.
"Maybe they will again discover after a lot more killing, as they did back in 2002 when they agreed to the last ceasefire, that this just leads to a stalemate again. But in the meantime there will be a lot of blood-letting."
Perera, meanwhile, put his hopes on a recent coalition between the governing Sri Lankan Freedom Party (SLFP) of Mahinda Rajapaksa, the president, and the United National Party (UNP), which had been the opposition in parliament.
"My only hope is this, that the UNP, which has a more accommodating line towards the Tamils, will start to exercise its influence over the SLFP, which is more hardline and Sinhalese nationalist," Perera said.
Matter of influence
"The government delegation in Geneva was all from the SLFP as the coalition has only recently begun. Maybe now there will be change in government policy on the conflict though."
It was the UNP that negotiated the 2002 ceasefire.
Meanwhile, in Galle, residents are trying to hope for the best.
Rajavi Mahandran, a Tamil, said: "We don't know what will happen now, but maybe they will meet again and start talking.
"We all want peace and not to live in fear. After the attack on Galle last week, the Tamil part of town was partly attacked. We were so frightened we would be killed in revenge for what had happened. How could anyone want that kind of thing to happen again?"