The military meanwhile said it had taken four LTTE bases during fighting in a neighbouring district.
Government troops backed by artillery and multi-barrel rocket launchers advanced overnight on Tiger-held territory in the district of Trincomalee, and about 150 Tiger fighters withdrew, Brigadier Prasad Samarasinghe, a military spokesman, said.
Samarasinghe said: "We have cleared three major bases and [a satellite base]. The Tigers fled the area when we fired artillery and multi-barrel rocket launchers.
"We have cleared the area because [the Tigers] were a threat to the villages and the camps close by."
The capture comes a day after thousands of civilians fled Tiger-held territory further south in the district of Batticaloa, which troops are also trying to clear, as the foes battled with artillery and mortar bombs.
|"We have cleared the area because [the Tigers] were a threat to the villages and the camps close by"|
Brigadier Prasad Samarasinghe,
Sri Lanka military spokesman
The government has publicly said that it wants to clear the entire eastern province of Tamil Tiger fighters, and Thoppigala is the last separatist bastion in Batticaloa and Ampara districts.
In the adjoining district of Trincomalee, the military said it captured three bases believed to have accommodated more than 100 anti-government fighters.
The defence ministry said it believed the Tigers suffered heavy casualties. There was no immediate reaction from the guerrillas.
The Tigers on Monday warned of a bloodbath if foreign powers were unable to convince the military to end a declared plan to wipe them out.
The government of Mahinda Rajapakse, Sri Lanka's president, says it will unveil a power-sharing proposal within weeks, but rejects Tiger demands for a separate homeland.
The Tigers have resumed their fight for an independent state for minority Tamils in north and east Sri Lanka, and analysts fear the conflict could escalate, harming investment in the $23bn economy.
Violence - deadly land and sea battles, ambushes and suicide attacks - have killed about 4,000 people in the past 15 months and about 68,000 people since the two-decade civil war began in 1983, even though the two sides agreed to a truce in February 2002.