International pressure, meanwhile, has been mounting on the government to call a ceasefire and allow trapped civilians to escape the combat zone.
Aid groups say about 250,000 people have been trapped and dozens of others killed in crossfire. The government, however, puts the number of trapped civilians at about 120,000 and says the military has taken "great care" to avoid civilian casualties.
The Sri Lankan president's comments also came amid reports that cluster munitions from an unidentified source had exploded close to "the last functioning hospital" in the northern war zone.
Gordon Weiss, a UN spokesman, told Al Jazeera: "We have 15 UN staff members and 81 members of their families in bunkers next to the hospital.
"They have been subjected to an 18-long hour artillery bombardment and we are doing our best to get them out of the area. At the moment it is very difficult.
We don't know precisely [who launched the bomb], but we do know that both sides possess the capacity," he said.
"The hospital was not hit by the cluster munition [but] it was in the vicinity."
Palitha Kohona, Sri Lanka's minister of foreign affairs, told Al Jazeera: "The Sri Lankan forces have given categoric assurances that they are not using cluster bombs, nor are they procuring them.
"I think it is high-handed to demand an investigation into the government at this time."
"Last week, the president announced a 48 hour no fire period, but LTTE did not allow this to happen," he said.
"I don't know what would be achieved by having a ceasefire, other than allowing the LTTE breathing space to regroup with renewed strength."
A day earlier, Hillary Clinton, the US secretary of state and her British counterpart, David Miliband, issued a call for a "temporary no-fire period".
"Both sides need to allow civilians and the wounded to leave the conflict area and to grant access for humanitarian agencies," they said.
|The army's advances come as the country marks its independence day [AFP]
An intense government offensive over the past year has dismantled the Tigers' mini-state in northern Sri Lanka, with the LTTE losing an estimated 98 per cent of the territory once under their control.
The LTTE, which is seeking a separate homeland in the north and east of the country, has been pushed into a 300 sq km slice of coastal area in the north.
The group has been battling government forces since 1983, alleging the marginalisation of ethnic Tamils by Sri Lanka's Sinhalese majority.
More than 70,000 people have been killed in the civil war.