Government troops and Tamil Tiger rebels engaged in heavy fighting around a key northeastern port Wednesday, with Sri Lanka's Defense Ministry claiming its forces killed 40 insurgents and wounded 70 others. Five government soldiers were reported killed.

The ministry's casualty claim could not be independently confirmed, but if true it would raise the death toll in recent days to 128 on both sides as worsening violence has many people fearful the island nation is plunging back into full-scale war.

There was no immediate comment from the rebels, who have accused the government of starting the latest round of fighting.

CountryWatch: Sri Lanka

A two-decade civil war killed about 65,000 people before a 2002 cease-fire that left wide swaths of the north and east under rebel control. Escalating violence since December has shredded the truce and killed more than 850 people, half of them civilians.

The government said its troops repulsed rebel attacks around the port of Trincomalee and disputed reports that rebels overran four army camps near the city.

Trincomalee's harbor is an important lifeline for thousands of soldiers based in the northeast, where the Tamil Tigers want to carve out a separate homeland for the country's 3.2 million ethnic Tamils to escape discrimination by the Sinhalese majority.

The Defense Ministry said government troops inflicted "heavy casualties killing over 40 Tiger cadres and wounding 70 other terrorists." The statement said the insurgents retreated, leaving bodies behind.

The army's director of operations, Brig. Athula Jayawardena, denied rebels overran army camps.

"They attacked three of our camps. Fighting is still going on. But we are 100 percent stable," he told The Associated Press.

A pro-rebel Web site, TamilNet, said the fighting began around 2 a.m. Wednesday with a rebel artillery barrage on army and police posts.

Rebel fighters "have overrun four key locations in Trincomalee district after fierce artillery shelling ... ," TamilNet said.

It also said an 8-year-old boy was killed and three women were injured when artillery fire hit a Roman Catholic church during fighting in the seaside town of Muttur, near Trincomalee.

The report did not say which side fired into the compound of St. Anthony's Church, where more than 600 people had taken shelter during the battle.

In recent days, Sri Lankan forces had been pushing to retake a reservoir that supplies water to about 60,000 people in government-controlled villages near Trincomalee. Rebels captured the reservoir last month.

The government insists it is committed to the 4-year-old cease-fire accord, but a rebel commander declared Monday that the Tamil Tigers considered the truce void.