Colombo - A suspected Tamil rebel suicide bomber set off an explosion in Sri Lanka's capital on Friday evening, killing at least two persons and wounding 35 others, shortly after President Mahinda Rajapaksa announced that government troops had captured a key town held by the rebels in the northern part of the country.

The suicide bomber attempted to enter the air force headquarters in the Fort section of the city and was about to be checked by airmen on guard duty when he set off the explosion, security officials said.

At least 16 of the injured were airmen while others were civilians who were passing by the air force compound.

Less than half an hour earlier President Rajapaksa, in an address to the nation, announced that troops had captured Kilinochchi town,
380 kilometres north of the capital, earlier in the day.

Rajapaksa called on the rebels to lay down their weapons and surrender.

"This is the last time I am telling the LTTE (Liberation Tigers of Tamil Eelam) to lay down weapons and surrender," Rajapaksa said in an address to the nation broadcast live on television.

He vowed to press on with the military offensive, saying that the army would soon liberate the remaining areas held by the rebels, and assured the minority Tamil population living in those areas security and safety.

Rajapaksa paid tribute to the government soldiers, saying some had to sacrifice their lives and others had lost their limbs in the war. He said the capture of the formerly rebel-held town was a decisive victory for the entire nation.

Security forces earlier advanced from the north, west and south towards Kilinochchi and entered the town on Friday afternoon, officials said.

Among the buildings captured was the former railway station.

In the southern part of the country dominated by the majority Sinhala community, people were seen lighting firecrackers and raising the national flag to mark the military victory.

Tamil rebels had been running a de-facto administration from Kilinochchi, establishing their political headquarters there and setting up their own police, courts and "tax office" in the town.

Civilians in Kilinochchi have withdrawn to the eastern side of the town. Some 350,000 people have been displaced by fighting between government troops and rebel forces.

Tamil rebels during the past few weeks have claimed that civilians have been hit in airstrikes by the Sri Lankan Air Force. The rebels released pictures of what they said were some of the casualties of the raids.

The government has made public appeals for civilians to leave rebel-controlled areas, but the rebels have enforced strict procedures for civilians living in areas under their control.

Until its capture by government troops on Friday, the town of Kilinochchi had been in rebel hands for 12 years. The capture of the area will enable troops to control a key highway which runs from the southern part of the country to the northern Jaffna peninsula.

Earlier, the rebels controlled some 70 kilometres of the road, but now have only about 10 kilometres under their control. The road has been closed for 18 months, forcing people to travel by sea or air from the south to Jaffna peninsula in the north.

The loss of Kilinochchi was considered a major setback for the rebels, who have been putting up stiff resistance during the past few weeks to prevent government troops from entering the area. Rebels erected earth bunds around the town to deter the attackers, but they failed to match the firepower of government troops, who have been using multi-barrel rocket launchers and have been backed by air cover.

The military launched what the government called a "humanitarian operation" aimed at "liberating civilians" from the rebels in August
2006.

In the first phase of the operation, rebel-held areas in the country's east were captured within a year and then operations to recapture the northern areas were launched.

Since the government campaign was launched in August 2006, more than 12,000 rebels and 2,500 soldiers have been killed, according to the military.

However, there has been no independent confirmation of the casualty figures given by the military. (dpa)