At least nine vessels were destroyed in a naval clash Thursday between Tamil rebels and Sri Lanka's navy off the northern coast, officials said, as a human rights group denounced the shelling of a school by the military in which at least 23 people were killed and scores injured.

Rebel military spokesman Rasiah Ilanthirayan told The Associated Press that fighting broke out when navy vessels disturbed the rebels' "routine naval exercises."

A Defense Ministry official, however, said about 16 rebel boats, including explosive-laden suicide boats, attacked a navy patrol and sank one boat.

The navy, assisted by the air force, retaliated, destroying eight rebel boats, the official said on condition of anonymity due to policy. One naval craft was destroyed in the battle and another was damaged.

There was no independent account of the incident, and no details of casualties were immediately available.

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Separately on Thursday, the military said Tamil rebels detonated a roadside bomb, killing two soldiers in northern Jaffna peninsula on Thursday.

Meanwhile, the government said it regretted Wednesday's artillery attack on the school.

"While we regret this whole episode, we say that national security is utmost," chief government spokesman Keheliya Rambukwella told a news conference.

Scores of civilians had taken refuge in the school in Kithiraveli, a rebel-controlled eastern Sri Lankan village from fighting between the army and Tamil Tiger guerrillas in when it was hit, senior rebel official Seevaratnam Puleedevan told The Associated Press.

He said at least 60 civilians were killed and 150 wounded.

Helen Olafsdottir, a spokeswoman for the European cease-fire monitoring mission, said monitors had counted 23 bodies, mostly of women, children and older people, and were still investigating. Another 137 people were admitted to hospitals, she said.

"Our monitors have visited the impact site and they have been told that as many as 40 rounds of artillery fire had hit the area," Olafsdottir said. She said the monitors did not find any sign of a rebel military installation in the impact area.

But Rambukwella said it was likely that the rebels had forced civilians to stay in the area to become human shields — a charge the insurgents denied.

London-based Amnesty International condemned the attack and called for an inquiry by international and independent human rights experts, saying there was an urgent need to "respond to the dramatic deterioration of the human rights and humanitarian situation."

In Colombo, 22 deputies from the Tamil National Alliance — a political party widely believed to be a proxy of the rebels — demonstrated in front of the U.N. refugee agency office, asking it to take action to protect displaced people.

The group said 41,000 Tamil civilians have been displaced in the Batticaloa region, the area of Wednesday's attack.

Rebel official Puleedevan said many villagers are now staying in makeshift tents or in the open, fearing more artillery fire.

"It is a pathetic situation," Puleedevan said. "There are more than 5,000 people there (in the village) and they are living in tremendous fear."

Military spokesman Brig. Prasad Samarasinghe said the military wasn't targeting civilians, but acknowledged that it had fired artillery to silence rebels' guns.

"Tiger shelling and mortar fire on security forces' detachments in the east intensified on Tuesday and Wednesday, compelling the army to retaliate to counter further terrorist shelling," the Defense Ministry said in a statement.

Peace broker Norway, meanwhile, called on the government to explain why troops fired grenades that landed just meters (yards) from chief European cease-fire monitor Lars Soelvberg on Wednesday as he was visiting the village of Pooneryn in the country's volatile north.

Norwegian Aid Minister Erik Solheim called the incident "very worrying."

"We have asked the Sri Lankan government for an immediate explanation," he said in a statement issued in Oslo.

Soelvberg, a Norwegian, was inspecting a road suggested by the government as an alternative to a main highway that has been closed since August because of heavy fighting between government troops and separatist rebels. He escaped unhurt. The military denied knowledge of Soelvberg's presence in the area when they attacked.

The Tigers have been fighting since 1983 for a separate Tamil homeland in the country's north and east, citing discrimination by the majority Sinhalese.

The conflict killed more than 65,000 people before a Norwegian-brokered truce in 2002, but subsequent peace talks failed. Surging violence this year has killed more than 2,000 civilians, soldiers and rebel fighters and threatens a return to all-out civil war.