The Tamil Tigers' peace secretariat said in a statement: "Five civilians were killed and seven more were injured, two of them critically, when Sri Lanka bombed a coastal civilian settlement in the Kiranchi area."
Fighting between the military and the LTTE has intensified since the government pulled out of a six-year-old ceasefire pact in January, though a renewed war has been raging since 2006.
The government of Mahinda Rajapaksa, the Sri Lankan president, argues that the LTTE used the truce to re-arm and was not sincere about talking peace.
He says he will crush the separatists militarily, and has captured large areas of Tiger-held territory in the east.
The latest fighting came as Angela Kane, the UN assistant secretary-general for political affairs, visited the country to assess the UN's operations for Ban Ki-Moon, the UN secretary-general.
It also came a day after US-based Human Rights Watch called on the UN Security Council to impose sanctions against the Tigers, and a splinter faction seen as allied to the government, for using child soldiers.
Human Rights Watch also called on the Security Council to condemn the Sri Lankan government, saying it was failing to investigate cases of child abduction and recruitment in its territory.
It also wants the government reprimanded, accusing elements of the security forces of complicity in abductions by the splinter "Karuna" faction, which analysts say helped the government to fight the Tigers in the east.
The violence hurt tourist arrivals last year, which fell 12 per cent from a year earlier, while the stock market slid nearly seven per cent in 2007.
The latest raids came after the ministry said 92 Tamil Tigers and three government soldiers were killed in battles for a bunker line in the north on Wednesday.
According to the defence ministry, about 1,450 LTTE fighters have been killed so far this year. The Sri Lankan military has estimated the LTTE strength to be at about 5,000 fighters.
The military said 83 soldiers and police have been killed in 2008.
Casualty figures provided by both sides differ wildly and cannot be independently verified since the government bars journalists and human rights workers from frontline and rebel-held areas.