The fighting marks the opening of a new northwestern front in the continuing conflict, with clashes traditionally concentrated in the northern and eastern districts.
"It is a serious situation and our central command is reviewing it," Ilanthirayan said.
A statement from the LTTE late on Friday said the military was using about 120 families in the region as human shields, and mounting attacks on their positions. The Sri Lankan military denied the claim.
"We don't use anybody as human shields," Samarasinghe said in response to the LTTE's allegations.
Samarasinghe said earlier the military launched an operation to defeat rebel gun positions in the area.
"Three soldiers were killed and four wounded in confrontations today," said Samarasinghe.
"Our aim is to neutralise the terrorists' artillery and mortar positions in the area so that civilian settlements and our camps are safe"
Brigadier Prasad Samarasinghe, Sri Lankan military spokesman
He said Sri Lankan army soldiers recovered a haul of arms, ammunition and other military equipment from the area.
"Our aim is to neutralise the terrorists' artillery and mortar positions in the area so that civilian settlements and our camps are safe," he said.
Later on Friday, government soldiers and guerrillas clashed in eastern Batticaloa district.
Government troops recovered six rebel bodies after the battle, Samarasinghe said.
At least 13 Tamil Tigers fighters were also killed in separate clashes in northern Sri Lanka on Thursday, he said.
The LTTE rebels have fought since 1983 for a separate homeland in Sri Lanka for the country's 3.1 million minority ethnic Tamils.
A Norwegian-brokered cease-fire in 2002 slowed the violence, but fighting flared again in 2005 after a new government promised to tackle the LTTE.
At least 4,000 people have since been killed, although neither side has officially withdrawn from the truce.