Lankan court blow to aid deal dims early peace talks hope

Hopes of using the aid deal signed three weeks ago for confidence-building was dashed when the court Friday blocked what is known as the Post-Tsunami Operational Management Structure (P-TOMS), diplomats said.

Top officials and diplomats close to Sri Lanka's Norwegian-backed peace initiative said they were surprised by the court ruling which dims prospects of getting the parties back to the negotiating table.

Both Colombo and the Libera-tion Tigers of Tamil Eelam (LTTE) had seen the deal as a stepping stone to resuming talks that have been stalled since April 2003 and saving an Oslo-brokered truce.

"The unfortunate fallout of this is the strengthening of the LTTE's claim that they can't function under the Sri Lankan state," a Western diplomat close to the peace process said.

He added that the diplomatic community was worried about the peace process amid a spike in violence in rebel-held parts of Sri Lanka.

The proposed fund to which international donors were expected to contribute was also illegal, the court held in a move that could hold up billions of dollars in international aid intended for tsunami survivors in rebel-held areas.