Colombo, November 7:

Sri Lanka’s president presented the impoverished country’s largest-ever defence budget to Parliament today as a fierce battle between troops and Tamil separatists in the country’s north killed 36 people, the military said.

Mahinda Rajapaksa, who also serves as defense and finance minister, asked Parliament for a 20 per cent increase in defence spending, bringing it to 166.4 billion rupees (US$1.5 billion; euro1 billion) from 139 billion rupees (US$1.3 billion; euro860 million) last year.

Senior government officials have said they plan to launch a major offensive in the coming months against the Tamil Tigers’ mini-state in the north in an effort to destroy the rebel group.

“We have no alternative but to completely eradicate terrorism,” Rajapaksa told Parliament in a nearly two-hour speech broadcast on national television.

Fighting between the two sides has escalated in recent weeks.

A new battle erupted about 5:30 a.m., when insurgents attacked government positions along the front lines at Muhamalai in the Jaffna Peninsula, just north of rebel-held territory, said a Defense Ministry official, who spoke on condition of anonymity. He said the battle killed 30 guerrillas and six soldiers.

Other fighting announced today killed five rebels along the front lines, the military said. Rajapaksa’s budget is expected to face sharp debate over the next two weeks. If it fails to pass, the government could fall, forcing new elections.