Tamil rebels on Saturday threatened to resume war if they are denied access to the sea, and claimed naval forces killed eight Tamil civilians in an attack in northern Sri Lanka.

The threat of renewed warfare by the Liberation Tigers of Tamil Eelam is the latest in a steady escalation of tensions that threatens to destroy a 2002 cease-fire agreement with the government.

CountryWatch: Sri Lanka

"We move with complete freedom in these waters to transport our cadres and to distribute material needs to our movement," Col. Soosai, who heads the Sea Tigers, the rebels' naval wing, was quoted as saying by the pro-rebel TamilNet Web site.

"We will not hesitate to wage war with anyone who attempts to prevent us from exercising our freedom," said Soosai, who like many rebels use only one name.

The warning came just days after rebel suicide boats rammed and sank a navy patrol craft. Thursday's attack and a subsequent fighting killed dozens. The government said about 50 insurgents were killed and 17 sailors were dead or missing.

The European Union warned that the attack was the worst infraction of the Norwegian-brokered truce since it was signed in February 2002 and said it could jeopardize the future of peace negotiations.

Later Saturday, the TamilNet site claimed the Sri Lankan navy surrounded the village of Allaipiddy on the northern Jaffna peninsula bombarded its residents with grenades and opened fire.

Navy spokesman D.K.P. Dassnayake said sailors in the area heard a blast but he denied the navy was involved.

"This is totally wrong. We are generally confined to barracks at night these days," Dassnayake said.

"This is someone else who is trying to pass responsibility (for the attack) to the navy," he said without elaborating.

TamilNet said eight people, including a child, died in the attack, about 300 kilometers (185 miles) north of the capital, Colombo, and another three were hospitalized with injuries.

An official at a hospital in Kayts, the islet on which Allaipiddy is located, confirmed the incident and said his staff had seen several bodies. He spoke on condition of anonymity for fear of reprisals.

Also Saturday, European cease-fire monitors announced they were suspending sea monitoring missions to "assess the situation" after an apparent rebel threat.

The acting spokesman for the Sri Lanka Monitoring Mission, Robert Nilsson, said monitoring will resume after consultations with field monitors on their security.

In a letter to the monitors on Friday, the rebels claimed the military was using the truce monitors on board navy crafts as "human shields."

"We urge you for the last time not to be on board Sri Lankan naval vessels until further notice from us. If you chose to ignore our warning and request, we are not responsible for the consequences," the rebels warned.

More than 170 people have died in violence since the beginning of April, and recent attempts to restart stalled peace talks have failed.

The Tigers began fighting in 1983 to create a separate state for ethnic minority Tamils, accusing the majority Sinhalese of discrimination. More than 65,000 people died in the conflict before the 2002 truce.