Chavakachcheri was reduced to rubble when Sri Lankan soldiers and Tamil Tiger rebels fought over it with rocket launchers, an infamous example of the price civilians paid for two decades of ethnic war.
But although many residents have returned and the sole shopping mall has been rebuilt, locals say Chavakachcheri also highlights the lack of promised government help in rebuilding their lives.
"So far we have not received anything from the government," said S. Satheeskumar, 21, a shopkeeper in a recently reopened jewelery shop.
The government's failure to deliver on promises to rebuild war-ravaged Tamil areas was one of the reasons the Liberation Tigers of Tamil Eelam (LTTE) suspended peace talks in April.
Nearly 70,000 people, or 19,000 families, have returned to Chavakachcheri, but so far only 4,000 families have received a promised 25,000 rupees (US$258) in government resettlement aid, said P.L. Thlaganayagam, a government bureaucrat in Jaffna.
All of the returnees have gone back to homes with caved-in roofs or collapsed walls.
Some, like widow Siuapatham Poomalar, do not even have that.
"I cannot go back to my home. It was completely destroyed so I cannot live there,"said Poomalar, who was selling vegetables in a market behind the shopping mall.
Poomalar, 50, stays with friends in another village close to Jaffna city 15km away, and has no idea how she will rebuild her house.
"So far there has been no help," said the mother of five. "I come back here to sell vegetables."
It was the second time Poomalar had had to flee because of the war, after fighting drove her out of Palaly in the northern part of the peninsula 13 years ago.
"My husband went missing when we left Palaly. I do not know what happened to him," she said.
While claims the government has done nothing were not entirely true -- a government body rebuilt the mall housing Satheeskumar's shop -- the rest of the rebuilding in Chavakachcheri was done by individuals, with international aid agencies pitching in on things like demining.
"There is a big difference between the private sector and the government," said Satheeskumar, who fled to Jaffna city in September 2000 when the battle between government troops and the rebels turned Chavakachcheri into a ghost town.
The town stands at a strategic junction between the Elephant Pass entrance to the peninsula and its main city.
It was one of the last big battles of the war before the two sides signed a Norwegian-brokered truce in February 2002. The area is still littered with landmines and unexploded ordnance.
"Your precaution ensures the prevention of your disablement and even death," reads one warning sign put up by an aid agency.
The destruction was so complete that Chavakachcheri became a must-see for visiting officials, including Prime Minister Ranil Wickremesinghe, and overseas guests such as US Deputy Secretary of State Richard Armitage.
"The business people have lost a lot, but so far they have not received any compensation," said Satheeskumar, who imports his gold jewelery from Singapore.
Chavakachcheri's one advantage is its location on the A9, the sole highway connecting Jaffna to the rest of Sri Lanka, so all traffic and goods pass through it.
For those who can afford it, there is even a shop selling new Indian-made motorcycles.
One model costs 86,000 rupees (US$886), 8,000 rupees more than in Colombo.