One government soldier was killed and three others wounded in Mannar district in the latest shelling by the rebels, the defence ministry said on Sunday.
It also said that the government troops retaliated and inflicted unspecified casualties on the guerrillas.
The ministry said that at least 49 Tiger rebels were killed in the latest fighting. The military placed its own losses at 10 killed and 46 seriously wounded, with another 45 listed as minor casualties.
For their part, the LTTE said they lost 13 of their combatants and claimed to have killed 60 government troops. Both sides are known to overestimate the losses suffered by the other.
Thousands of civilians living along the de facto border separating Tamil Tiger territory from the rest of the island fled to the safety of public buildings to avoid shelling by both sides, local officials said.
They said about 300 civilians had crossed the front lines on Saturday and entered government-held areas, where troops provided them with food.
The Tigers said the refugee crisis in Mannar has compounded problems for relief workers already grappling to feed nearly 300,000 internally displaced people in the island's embattled regions.
Relief worker killed
The rebels on Sunday accused the army of planting a roadside bomb that killed a local aid worker and wounded three others when it exploded near their vehicle in Mannar on Saturday.
"This is the work of the Sri Lankan army's deep penetrating unit," Navaruban Selvy, LTTE spokeswoman, said by telephone from her office in the rebel-held town of Kilinochchi, about 300km north of the capital.
"The victims were trying to arrange relief for the civilians recently displaced as a result of the latest fighting"
Navaruban Selvy, LTTE spokeswoman
"The victims were trying to arrange relief for the civilians recently displaced as a result of the latest fighting."
The worker was a volunteer with the Tamils' Rehabilitation Organisation, a local charity that operates refugee centres and distributes aid in rebel territory.
Sri Lanka's military denies carrying out bomb attacks inside rebel-held territory, but military sources have acknowledged that small groups of troops are operating behind rebel lines.
The report of the blast came as the defence ministry said it had killed two suspected Tamil Tiger rebels in the northern peninsula of Jaffna, further north of Mannar, on Saturday.
In the east of the island, police recovered the body of six suspected Tiger rebels killed by troops in a confrontation over the weekend and a magisterial inquiry was held on Saturday, police said.
More than 4,000 people have been killed in a wave of fighting in Sri Lanka since December 2005. The violence comes despite a truce in place since February 2002.
The LTTE has been waging a 35-year campaign for an independent homeland for Sri Lanka's Tamil minority in this majority Sinhalese nation.