Norway fears isolation over Lanka peace role

Norway, which is not an EU member, has mediated talks between the Sri Lankan government and Tamil separatists since 2000.

Under pressure from the United States, the 25 EU members on Thursday agreed, from next week and at the latest "before June", to place the LTTE on its list of terrorist organisations.

The move will notably allow greater scrutiny of funds transferred to the rebel group.

"It certainly means that Norway may become even more isolated in the Sri Lankan peace process, since we will be one of the few countries able to deal completely impartially with both Sri Lankan authorities and the Tamil Tigers," Solheim told Norwegian national radio NRK.

In fresh violence, Sri Lankan government forces and Tamil Tiger rebels traded artillery fire across a de facto front line in the island's north yesterday, military officials said.

There were no immediate reports of casualties on either side after a 30-minute exchange of fire at Muhamalai in the Jaffna peninsula, but the main entry and exit points in the area were briefly shut, officials said.