Sri Lankan fighter jets and artillery bombarded rebel positions for a second day in the country's north and east, peace monitors said Friday, even as the president pledged to press on with peace efforts after a bus bombing killed 64 people.

The government said Tamil Tiger rebels were behind Thursday's bombing — the worst single act of violence since a 2002 cease-fire — while the rebels insisted the air and artillery strikes showed the military was on a war footing.

CountryWatch: Sri Lanka

While the two sides traded accusations, some 10,000 mourners prayed at a funeral for 61 of the bombing victims, including 15 children.

Buddhist monks and Roman Catholic priests led the funeral in the northeastern village of Kabithigollewa, with the dead women wrapped in white saris and the men in white sarongs. Fifty-six victims had red paper flowers placed in their open palms before relatives and friends lowered their coffins into mass graves. Other bodies were taken away by relatives for private funerals.

With peace talks largely abandoned, the bus attack and retaliatory strikes edged this tropical island nation off southern India further toward all-out war in a conflict that killed 65,000 people before the 2002 truce.

Air force jets dropped bombs and the army lobbed artillery shells into a rebel-controlled area around the northern town of Kilinochchi throughout Friday, said Thorfinnur Omarsson, spokesman for the Nordic mission monitoring the often-violated truce.

Sri Lankan troops also shelled Tiger bases near the eastern ports of Batticaloa and Trincomalee on Thursday and early Friday, Omarsson said. Earlier reports indicated the government attacks were limited to rebel-held areas in the north.

"We don't know if this is just a limited response or if it might be a move to inflict real damage" on the rebels, Omarsson told The Associated Press.

Tiger leader Seevaratnam Puleedevan said at least eight bombs had been dropped near Kilinochchi, but he could not provide casualty figures.

"I think the Sri Lankan government, by launching the air raids, is showing that they are ready for war," he said. "We are assessing the ground situation, and our Central Command will take appropriate action."

The rebels have been fighting since 1983 to create an independent homeland for the ethnic Tamil minority, claiming systematic discrimination by the country's Sinhalese majority.

During the war, the Tigers carved out large swaths of territory in the north and east of the island, effectively creating independently administered zones complete with courts, tax collectors and even police speed traps.

The military attacks began after suspected insurgents blew up a bus in a predominantly Sinhalese area Thursday. Sixty-four people were killed and at least 78 were wounded.

The bus was blown up by a pair of land mines that were hung from a tree and detonated by remote control, the army said.

Within hours, the Sri Lankan air force began retaliatory attacks on positions controlled by the rebels, formally known as the Liberation Tigers of Tamil Eelam.

The rebels denied responsibility for the attack and suggested it was done by shadowy forces they accused of trying to create unrest. But Sri Lanka's government, dominated by the majority Sinhalese, insisted the rebels were responsible.

At the same time, President Mahinda Rajapakse insisted he remains committed to seeking peace with the rebels.

"We will not let this incident, however barbaric it is, sabotage the peace process. We are deeply committed to the peace process," the president was quoted as saying by the state-run Daily News on Friday.

In Washington, State Department spokesman Sean McCormack said the United States condemned the attack and called for resumed negotiations.

"This vicious attack bears all the hallmarks of the Liberation Tigers of Tamil Eelam" and violates the cease-fire agreement, he said.