Sri Lanka's government and Tamil Tiger rebels began talks on Monday to end one of the world's longest-running wars but their opening remarks, while guardedly optimistic, highlighted a deep gulf. After the speeches at a beach resort in Thailand, delegates were whisked away to a nearby naval base at Sattahip for their first direct talks in seven years to try to end a war that has killed 64,000 people and flattened the tropical island's economy.

Investors in Sri Lanka latched on to the mood of optimism. Stocks closed at their highest for five years, with the Colombo all-share index rising 1.38 percent to break the key 800-point level.

"We are seriously and sincerely committed to peace and we will strive our utmost to ensure the success of the negotiations," Anton Balasingham, chief negotiator for the Liberation Tigers of Tamil Eelam (LTTE), told the opening ceremony.

"A firm foundation has been laid for peace negotiations by the principal parties in the conflict," he said, calling for international help to rebuild Tamil areas of the island.

Chief government negotiator G.L. Peiris described the 19-year-old ethnic war as "unique in its ferocity" but said that now lay in the past.

"Together we repudiate today a legacy of rancor and hatred which has torn asunder the fabric of our nation for decades," he added. "A sea change is necessary now the tempest has abated."

The Tigers, who have sent hundreds of suicide bombers to their deaths and assassinated leading politicians, were hit by fallout from the September 11 hijack attacks that killed more than 3,000 Americans and other nationals in the United States last year.

The changed world since September 11 and earlier international bans crimped their overseas fundraising.

But the December election that brought Prime Minister Ranil Wickremesinghe to power on a peace ticket in December also showed a majority of the island's people hankered after real change.

POLITE TALK, NO FLAGS

Balasingham walked into the ceremony talking politely with Peiris, something unimaginable until earlier this year when both sides signed a Norwegian-brokered cease-fire.

There were also no government or LTTE flags on display, an issue in previous failed talks.

Both sides praised Norway's role in bringing about talks seen as the best chance yet to end a conflict that has made the tropical island's name synonymous with war.

But the talks, which started with a three-hour session on Monday afternoon, will initially focus on aid and rebuilding war-torn areas, leaving contentious issues, such as Tiger demands for a separate state, until later rounds. Peiris also paid tribute to what he called the foresight of the Tamil Tigers, including their reclusive leader Velupillai Prabhakaran, for "embarking on the transformation of their movement into a political organization."

But he and Balasingham both touched on a Tiger demand for a separate state in the north and east for Tamils, who say the island's Sinhalese majority discriminates against them.

Balasingham said Tamils wanted "a permanent peace in which our people enjoy their right to self-determination and to co-exist with others."

Peiris, speaking first, said any Tamil aspirations "must necessarily be effected within the framework of a state whose unity and territorial integrity is ensured in fact and in law."

Norway will also be represented in the room for the face-to-face discussions, which will run until noon on Wednesday.

Norwegian Deputy Foreign Minister Vidar Helgesen pleaded with diplomats in the audience to help rebuild Sri Lanka, saying that was the way to ensure that the peace process continued.

He asked them "not to wait for peace to happen tomorrow, but to start investing in peace today."

The fighting destroyed vast areas of the north and east while the threat of Tiger suicide bombers turned the capital Colombo into an armed fortress.

Suspected Tiger suicide bombers killed former Indian Prime Minister Rajiv Gandhi in 1991 and Sri Lankan President Ranasinghe Premadasa two years later.

But since Prime Minister Wickremesinghe won elections last December on a pro-peace mandate, and especially since the truce, a sense of optimism has returned, with barricades coming down in Colombo and roads being reopened into rebel areas.

The cease-fire has mostly kept the guns silent, with just a handful of soldiers and rebels killed this year, compared to previous tolls of more than 3,000 deaths annually.

The war has also handcuffed the economy, directly through military spending of up to 1 billion a year, and indirectly by keeping tourists and investors away.

PHOTO CAPTION

Sri Lankan government chief negotiator G. L. Peiris (R) shakes hands with his Tamil Tiger counterpart and adversary Anton Balasingham at the first round of Sri Lankan peace talks at a Thai Navy base in Sattahip, September 16, 2002. Talks to end one of Asia's longest-running and deadliest wars kicked off on Monday with Sri Lanka's government and Tamil Tiger rebels optimistic and pledging to overcome the bitterness of the past. (Pool/