Dr V Shanmugarajah, a district government medical officer, had said 49 people were killed and more than 50 injured when the makeshift hospital in Mullivaikal, in the so-called safe zone, was hit early on Tuesday by a mortar shell.
Civilians who had been injured in attacks over the weekend were among those killed when the admissions ward consisting of a tin roof and blue tarpaulin walls was hit.
"We are struggling to cope with treating patients here. There about 750 injured patients warded here. There are insufficient beds, medicine to handle them. We are in dire straits," Shanmugarajah said.
Two other hospital officials confirmed Tuesday's attack to the Associated Press news agency and all three health officials declined to say who had fired the shells, but the Liberation Tigers of Tamil Eelam (LTTE) separatists fighting the government blamed the military.
Seevaratnam Puleedevan, a Tamil Tiger spokesman, said civilians were fleeing in all directions inside the zone.
|Rights groups say the military and Tamil Tigers are using civilians as "cannon fodder" [AFP]
"There's no place to seek shelter or protect themselves," he said.
"We are really afraid that if the Sri Lankan government is not being pressured to stop the carnage, then many more civilians will die."
The government denied responsibility, saying it had not used heavy weapons in the area for weeks and blaming the separatists instead for attacking civilians.
Samarasinghe also questioned the credibility of statements attributed to Dr Shanmugarajah, saying there was "no free flow of information from" the conflict zone "under control of the LTTE".
"Two days ago I saw a doctor on Al Jazeera who was commenting out of this area saying that 372 civilians have been killed.
"When we looked into this, we found that this doctor had not been in contact with the ministry of health since October 2008. So how do you establish the bona fides of people who get on the telephone and say this mayhem is going on?"
The claims and counter-claims are impossible to verify as the government has banned independent reporters and aid groups from the war zone.
Heavy weapons evidence
But satellite images released by the American Association for the Advancement of Science show craters that seem to indicate heavy weapons had been used recently.
John Holmes, the UN humanitarian chief, said the government was still using heavy weapons, although he did not say who was responsible for Tuesday's attack.
"Neither the Sri Lankan army nor the Tamil Tigers appear to have any reluctance in using civilians as cannon fodder"
Human Rights Watch
"The government have said they are not using heavy weapons, but the evidence suggests that they are continuing to do so, at least to some extent, and that's obviously contributing to the dreadful casualty figures that we've seen," he said in Geneva.
Holmes also accused the Tamil Tigers of holding the civilians in the war zone as human shields, a claim supported by testimony from those who have fled the war zone.
Rights group Human Rights Watch also disputed the government's insistence that it has stopped using heavy weapons in the war zone, but also blamed the Tamil Tigers for trapping civilians.
"Recent satellite photos and witness accounts show the brutal shelling of civilians in the conflict area goes on," said Brad Adams, Asia director at the US-based group.
"Neither the Sri Lankan army nor the Tamil Tigers appear to have any reluctance in using civilians as cannon fodder," he added.
Tens of thousands of people have fled the fighting in recent weeks to state-run refugee camps, but the UN estimates that about 50,000 civilians remain trapped in the narrow strip of land still held by the Tamil Tigers.
The LTTE is believed to be close to defeat in its 26-year battle for a separate homeland in the north and east of the island for the country's minority Tamils.
The government has rejected international calls for a humanitarian ceasefire, saying it would allow the LTTE to regroup.
Tuesday's attack came after a weekend of heavy shelling that killed more than 300 people and injured more than 1,000 civilians in what the UN has described as a "bloodbath".
Many of the casualties from that fighting had been taken to the Mullivaikal hospital.
Meanwhile, the UN, US and Britain issued statements of concern over the Sri Lanka crisis.
Holmes called the situation "awful" on Tuesday after returning from Sri Lanka and Ban Ki-moon, the UN secretary-general, said on Monday that he was "appalled at the killings of hundreds of civilians in Sri Lanka over the weekend" and repeated his call for both sides to cease using heavy weapons.
Hillary Clinton, the US secretary of state, and her British counterpart David Miliband put out a joint statement after meeting on Tuesday, calling for "a political solution that reconciles all Sri Lankans, and establishes a meaningful role for Tamil and other minorities in national political life".