Sri Lanka's Tamil Tiger rebels on Sunday agreed to lift a two-week-old water blockade on government-held villages that has provoked some of the fiercest fighting in years.

The rebels decided to end the blockade after talks with Norwegian peace envoy Jon Hanssen-Bauer. But they said the move was conditional and could be reversed if the government resumes military attacks on rebels or rebel-held territories.

"Our national leader has decided to open the sluice gate in response to a request made by" Norway, said Tamil Tiger political leader S.P. Thamilselvan, referring to Velupillai Prabhakaran, the secretive leader of the Liberation Tigers of the Tamil Eelam.

CountryWatch: Sri Lanka

The rebels shut down a reservoir last month, drying up water supply to 60,000 people. The military responded with airstrikes and a ground assault that soon spread to adjoining areas.

The government reacted skeptically to the rebels' announcement.

"The control of the water supply should be on the sovereign government of Sri Lanka, and the terrorists should vacate from the areas and around," government spokesman Keheliya Rambukwella told The Associated Press. "We will have to wait and see, water should not be made a political tool."

Sri Lanka soldiers said Saturday that had regained control over the town of Muttur after six days of intense fighting around the northeastern port town of Trincomalee. They urged thousands of displaced people to return home.

The rebels, however, did not admit defeat, insisting they had withdrawn from Muttur.

A surge in fighting has threatened to drag Sri Lanka back into civil war, four years the two sides reached a cease-fire brokered by Norway.

Thamilselvan demanded the government stop its military offensives and address water and other humanitarian needs of ethnic Tamils living in rebel-held areas. "We will consider any future airstrikes or attacks by the government as their withdrawal from the cease-fire," Thamilselvan said.

The rebels fought for almost two decades to carve out a separate homeland for Sri Lanka's 3.2 million ethnic Tamil minority. The civil war killed about 65,000 people.

More than 900 people -- half of them civilians -- have been killed in renewed fighting since December.