Sri Lanka's Tamil Tiger rebels said a decision by President Chandrika Kumaratunga to order snap elections was a "grave setback" to peace efforts but they vowed to maintain a two-year ceasefire with government forces.
The island's main stock market index plunged as much as 8 percent yesterday as analysts worried that the election could do lasting harm to the peace process and at best leave a political deadlock in government unresolved.
"The dissolution of the Sri Lankan parliament and the call for a snap election constitutes a grave setback to the peace process," the rebels' chief negotiator, Anton Balasingham, was quoted as saying on the Tamilnet Web site yesterday.
"Our liberation organization will rigidly observe the ceasefire regulations and maintain peace," Balasingham said.
Kumaratunga, who is locked in a power struggle with Prime Minister Ranil Wickremesinghe, dissolved parliament on Sunday and set a fresh vote for April 2 in an attempt to break a stalemate between the two.
The president, who was wounded in a 1999 rebel attack, takes a harder line on the Tamil Tigers than Wickremesinghe, who was elected separately and belongs to a rival party.
"The irrational lack of consensus among the Sinhala ruling elites on the resolution of the ethnic conflict has plunged the entire country into serious political instability," said Balasingham, who is based in London.
The rebels have said they will negotiate with any leader who wins a mandate.
But they make no secret of their dislike for Kumaratunga.
The president's People's Alliance has also linked up with the hardline Sinhalese JVP party which is opposed to giving concessions to the rebels.
The Liberation Tigers of Tamil Eelam have been fighting for two decades for a separate homeland in the north and east of the island for minority Tamils, saying they are discriminated against by the Sinhalese or Sinhala majority.
At least 64,000 people have been killed in the violence.
Stocks reacted sharply in the first trading day after the decision to dissolve parliament, falling 8 percent in early trade.
The Norwegian-brokered cease-fire has given Sri Lanka its longest lull in fighting since the 1983 start of the civil war.
Talks on a political agreement stalled in April, when the rebels walked out. Efforts to revive those talks crashed in November, when Kumaratunga sacked three govern-ment ministers, saying Wickre-mesinghe was too soft on the rebels. Since then, there has been a political stalemate.
Analysts say it is unlikely the election will solve anything.
If Kumaratunga's People's Alliance wins, talks would be complicated by her recent pact with the ultra-nationalist People's Liberation Front (JVP).
If the prime minister's United National Party (UNP) wins, the status quo continues -- and he faces a powerful president, whose job is not up for election and who suspects he would compromise security to make peace.
Wickremesinghe's party and Muslim allies have 114 seats in the 225-seat parliament and the support of 15 Tamil legislators; Kumaratunga's People's Alliance and the JVP together have 93.
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