Reuters reports say that a gun battle ensued between the security forces and suspected guerrillas who were hiding in the nearby buildings and the government's newspaper publishing house Lake House 300 yards east of the scene of the blast. Fighting went on till evening when the Army announced that five guerrillas and a soldier were killed. In a massive security sweep of Colombo following the explosion, over 100 people were taken into custody.
The fact that the explosion took place on a Buddhist poya holiday prevented many more casualties in an area which is usually crowded during week days. In January 1996 the LTTE’s Black Tiger suicide bombers extensively damaged the Central Bank, a short distance from the current blast, killing over 80 people.
Some observers say the attack was aimed at the Twin Towers which temporarily housed the Central Bank and the hotels in another attempt to ruin the Sri Lankan economy. Central Bank Governor Amarananda Jayawardena maintains the economy which shows signs of improvement after a slump last year due to prolonged drought and increasing war expenditure will not be affected.
Last year’s growth rate was 3.8% and a 6% growth in the GDP is predicted this year. Defence allocation which was Rs 47 billion or 6.5% of GDP last year is expected to rise to Rs 49 billion in 1998. Mr Jayawardena concedes that tourism will be affected to some extent. In the first seven months of 1997, 205,100 tourists visited Sri Lanka, a 20.6% increase as compared to the same period last year.
Many people believe that the bomb was aimed at the Galadari hotel where a 15-member team of US Green Beret commandos were said to have taken residence. Reports say the team is the third since March last year under the US training programme for the Sri Lankan military named Operation Balanced Style. It was revealed in mid-1996 that US commandos were providing training at Wirawila airbase in Hambantota District, south-east of Colombo. The US government denied that US soldiers were involved in combat operations in Sri Lanka.
On 8 August the US State Department declared the LTTE as a terrorist organisation under the 1996 Anti-terrorism Act, following a recommendation of the US Senate in early August. The declaration makes it illegal to raise funds for the LTTE and denies entry to Tiger members into the country. Justice minister GL Peiris says that the Sri Lankan government would now consider proscribing the LTTE, but a ban would not close the door for peace talks, provided government conditions are met.
Sri Lanka’s NGO-led National Peace Council says a ban or military action would only lead the LTTE to ever more destructive means of fighting and has called both parties to enter into negotiations.