WASHINGTON A US official warned on Monday that time was running out for a deal that he hoped would bring lasting peace to Sri Lanka as he pressed for both sides to halt the fighting.

Sri Lankan authorities had set a deadline of midday (0630 GMT) on Tuesday for the surrender of Tamil Tiger supremo Velupillai Prabhakaran and his cadres making a last stand among thousands of civilians in a northeastern sliver of the island.

The rebels ignored the deadline to surrender, as the Sri Lankan army on Tuesday seized more territory from the Tigers, the defence ministry said.

US official Michael Owen said Sri Lanka should offer a package in which the Tigers — fighting since 1972 for a separate Tamil homeland — hand in their arms, possibly to a third party, in exchange for amnesty for low-level cadres.

During the surrender, both sides would hold fire and let civilians leave, he said.

“We are running out of time,” Owen, the acting deputy assistant secretary of state for South Asia, told the Brookings Institution think-tank. “Really, there is literally only a couple of days to try to get this finalised.” “It is something we have been working on very hard and quietly behind the scenes because the only potential we see to bringing this to an end is to have a package in which we have a pause and civilians are allowed to leave,” he said.

But he acknowledged the difficulties, saying “We don`t have any illusions that this is easy to engineer.” A Sri Lankan spy plane showed that tens of thousands of civilians on Monday fled the designated safe zone where the Tiger leadership is holed up. Owen, who estimated around 140,000 civilians had been in the safe zone, said the exodus proved that civilians were not staying inside by choice as asserted by the Tigers.

But he said any endgame in the conflict needed to make “sure that the conflict doesn`t reignite as a result of the mistakes we make now.” A solution in Sri Lanka should include devolving power, he said. Sri Lanka reached an accord in 1987 after Indian military intervention to devolve power to Tamils in the island`s north and east but the deal was never fully carried out.

Owen said that while the United States considered the Liberation Tigers of Tamil Elam (LTTE) — known for their trademark suicide bombings — to be a terrorist group, some Tamils supporting them had “legitimate grievances.” “I think it is imperative for Sri Lanka to find a way to give everyone in the community — all Sri Lankans — a legitimate voice in their government,” he said.

Human Rights Watch said that the United States and other nations should take a more active role in pressing Sri Lanka. It singled out Japan, which is the island`s top donor.

Anna Neistat, a senior researcher at the New York-based rights group, said the clock was ticking for the international community “to make it crystal clear to both sides of this conflict — both the LTTE and the government of Sri Lanka -- that they will not get away with it.” “We are concerned that it is going to be a bloodbath,” Neistat said.

But Jaliya Wickramasuriya, the Sri Lankan ambassador to the United States, said that the priority was to rescue civilians.

“We are not going to do any huge operation as such,” he said. “We are still concerned about civilians.” The UN refugee agency also voiced concern for survivors — both civilians who fled the safe zone and those still inside.

The agency`s capacities are under “enormous pressure” to care for civilians who fled to camps, Amid Awad, the representative in Sri Lanka of the UN high commissioner for refugees, told the Brookings Institution forum.

But he said the situation was even worse inside the “safe zone” due to adverse conditions including winds, rain and limited supplies of food and medicine.

Humanitarian group World Vision said more than 65,000 people were already in camps in Jaffna, Mannar and Vavuniya districts, and that more humanitarian aid — and funding for such aid — was urgently needed.

“There is great need for medicines, food and shelter,” World Vision Lanka`s director Suresh Bartlett said in a statement.

“Humanitarian agencies want to be ramping up their responses to help.”—AFP