The army said that since Tuesday at least 50 Liberation Tigers of Tamil Eelam (LTTE) fighters had been killed - and twice as many wounded - in heaving fighting.
Sri Lanka's defence ministry did not say if government forces suffered casualties, although the Associated Press news agency reported that Nanyakkara confirmed four soldiers had died in the fighting.
The Sri Lankan government has pledged to defeat Tamil fighters by the end of 2008 in an attempt to end the 25-year separatist campaign.
However, government officials made the same promise in 2007 but faced stiff resistance from Tamil fighters.
A defence ministry statement issued Thursday described the fighting as "fierce and prolonged for hours until the terrorists were completely beaten by the determined soldiers".
The Tigers made no comment on the military's statements, but said on Wednesday that civilians had been killed in the fighting.
It is difficult to verify battle accounts and casualties as reporters are barred from the war zone.
The rebel Tigers have waged a long war for independence for Sri Lanka's minority Tamil community, who have suffered marginalisation by successive governments controlled by the Sinhalese majority.
Around 70,000 people are thought to have been killed since separatist fighting began in 1972.