Sri Lankan forces bombarding rebels with artillery on Wednesday hit a school where scores of civilians had taken refuge from the fighting, killing at least 45 Tamils and wounding 125 more in the country's east, a senior rebel official said.

The government accused the Tamil Tiger rebels of using civilians as human shields, and said its forces were only retaliating against intense rebel shelling.

All the dead and wounded were from Sri Lanka's Tamil minority, in whose name the Tigers say they are fighting the government, dominated by island nation's Sinhalese majority.

"It was a big attack and we have 45 dead bodies," Seevaratnam Puleedevan, who heads the rebels' Peace Secretariat, told The Associated Press by satellite phone. Puleedevan said 125 people were also wounded, some seriously.

Among the dead were six infants, the rebels said.

A doctor attending the wounded said most had broken bones and deep wounds caused by shrapnel. The doctor spoke on condition of anonymity fearing reprisals.

Rights group Amnesty International condemned the incident.

"It is appalling that the military should attack a camp for displaced people — these are civilians who have already been forced from their homes because of the conflict," Amnesty's Asia Pacific Director Purna Sen said.

"We condemn all attacks on civilians and are particularly saddened and shocked to see such a large-scale attack on civilians just days after the government's announcement of its Commission of Inquiry into human rights abuses."

"Killing and injuring civilians can never be justified. The government must investigate this terrible attack as a matter of urgency. It must ensure that those responsible are brought to justice to signal to the rest of the military that attacking civilians will not be tolerated," Sen said in a statement.

Click here to go to FOXNews.com's Asia Center.

Wednesday's attack was the second-worst in terms of Tamil civilian casualties since the signing of a truce in 2002. On Aug. 14, an air raid allegedly killed 61 Tamil girls in the rebel stronghold Mullaitivu. At the time, the government said it had proof that the site was a rebel base, although rebels said the victims were school girls undergoing first aid training.

The worst single attack suffered by the Sri Lankan military was on Oct. 16, when a rebel suicide bomber rammed an explosives-packed truck into a military bus convoy in central Sri Lanka, killing at least 95 sailors and wounding more than 150.

Jehan Perera of National Peace Council, an independent think tank, warned that the incident may further worsen relations between the two sides and make any further cooperation "unrealistic."

"It shows that the government is placing its reliance on a military option. The government must think again because the cost to the civilian population is very high," Perera said.

Rebel official, Puleedevan, issued a warning.

"We still hope the international community will take strong action to stop such attacks, otherwise it may be too late," he said referring to a tenuous cease-fire that halted the tropical island's two decades of civil war in 2002, but has come under tremendous strain with almost daily fighting.

Military spokesman, Brig. Prasad Samarasinghe said exchange of artillery has been continuing in the area for the last few days. "This morning, they (rebels) intensified their artillery attack, five of our soldiers were also wounded. We also retaliated to their attacks," he said.

Samarasinghe said he was not aware of the casualties in the rebel-held area and claimed the rebels were using civilians as human shields.

"Ground and technical sources confirm that tiger terrorists are using civilians as a human shield amid heavy artillery and mortar fire between the LTTE and the Security Forces," the Defense Ministry said on its Web site, calling the rebel group by the initials of its formal name, the Liberation Tigers of Tamil Eelam.

The rebels responded with a stern statement.

"The mindless and cruel attack on a helpless refugee population which has already been subjected to blockades of all sorts of essential items is difficult to understand," the rebels said on their Web site.

"Is it possible that the Sri Lankan military's intention was to teach the Tamils the lesson that they, the military, can kill refugees in such numbers, and no one can stop them?"

Sri Lanka Monitoring Mission, a group of foreigners overseeing the 2002 cease-fire, has said 1,076 civilians have been killed in violence in Sri Lanka since early this year.

The Tamil Tigers have been fighting since 1983 for a separate homeland for ethnic Tamils in the north and east of Sri Lanka, citing discrimination by the majority Sinhalese. More than 65,000 people were killed before the truce. An upsurge in violence this year has killed more than 2,000 people, including civilians, soldiers and rebel fighters.