Sri Lanka peace process at delicate point. Talks raise hopes for solution, but final accord must include militants

Prospects for peace in this war-torn island hang in the balance following the latest round of peace talks that ended without a conclusive agreement. In the balmy capital of Colombo, where the talks wound up Saturday night, the mood is one of general hopefulness that a political solution to the island's ethnic strife may be reached in the near future. Expectations have been running high here and in India for a positive outcome from negotiations have gone on intermittently since last July between the Sri Lankan government and the moderate Tamil United Liberation Front.

However, sources close to the negotiations say, the talks cannot produce a final agreement without the involvement of militant Tamil groups that are waging a secessionist war in the north and east. The latest talks were described as useful, but left a number of vital issues unsettled.

Discussions on less contentious issues of government proposals to grant greater autonomy to the Tamil minority appear to have made limited progress. But no final decision has been reached on the Tamils' fundamental demand for a merger of the island's Tamil-dominated northern and eastern provinces.

The moderate Tamils are expected to consult with the Indian government and Tamil rebel leaders this week before another round of talks resumes later this month, possibly in New Delhi.

Sri Lanka's minority Tamils are seeking a power-sharing arrangement that would allow them to assert authority in regions where Tamils are concentrated. Both the government, which is dominated by the majority Sinhalese, and the moderate Tamils want a compromise that would shift some federal powers to nine provincial councils, without fundamentally altering Sri Lanka's Constitution.

Since 1983, when a spate of communal riots left at least 2,000 Tamils dead, fighting has taken a heavy toll in lives (Tamils claim more than 5,000 have died in the conflict) and on the economy.

India, which has a 50-million-strong Tamil population in its southern Tamil Nadu State, has played a key role in bringing about the peace talks. Tamil Nadu serves as an unofficial base of operations for Sri Lanka's Tamil guerrilla groups, although the Indian government does not like to admit this.

Since the collapse of talks last year and the subsequent resurgence of violence, pressure from India and other countries for the Sri Lankan government to resume negotiations has mounted. India's Foreign Ministry has helped Sri Lankan President Junius Richard Jayewardene work out proposals for granting greater autonomy to the Sri Lankan Tamils.

``Previously, only a framework was presented. Now, there are actual constitutional proposals that spell out very clearly defined provisions on key issues,'' says an Indian government spokesman in New Delhi.

This is the first time President Jayewardene's government has actually presented a complete package for granting more power to the Tamils through provincial councils, analysts say. The councils are patterned after the Indian federal system -- with each council having a president-appointed governor and a chief minister chosen by an elected provincial council that has legislative, financial, and executive powers.

The councils would also control the distribution of land -- another key issue in Sri Lanka's communal conflict. But the central government will still have the power to use the lands it requires. One major Tamil grievance involves the government's policy of settling Sinhalese people in the predominantly Tamil regions to reflect the national population ratio of 74 percent Sinhalese to 26 percent minorities.

Tensions are particularly acute in Trincomalee and Batticaloa Districts in the east, where ethnic Tamils have a plurality relative to Muslims and Sinhalese. Although the northern province is under Tamil control, the eastern province continues to be a battlefield.

Control over the east is crucial both politically and geographically. With a deep-water harbor, Trincomalee is a vital port and naval base. To the Tamil militants, the east is part of a Tamil homeland, or ``Eelam,'' made up of Tamil-speaking areas. Even so, the nation's Muslim minority is concentrated in this province.

Although talks appeared to make limited progress on other less contentious issues, the Tamil rebels' demand for a merger of the north and east remains the single biggest stumbling block.

The government maintains that Tamil-dominated areas are not contiguous and that Muslims do not want to become a minority within a minority.

Militant leaders based in Madras, the capital of India's Tamil Nadu State, say Jayewardene's proposals are not a satisfactory basis for negotiations and they have not participated in talks. The proposals are also opposed by most Sinhalese political groups and Buddhist religious leaders. Some Sinhalese feel threatened by Tamils from Tamil Nadu, a historic fear arising from periodic invasions from the mainland in ancient times.

Though without a mandate from Tamil rebels, the moderate Tamil United Liberation Front is arguing for one provincial council for the north and east.

``This is something fundamental to our interests. It concerns the integrity of that territory and the unity of the Tamil people. We have to negotiate with the government and arrive at a solution somehow,'' says Appapillai Amirthalingam, leader of the moderate group.

One possible solution is to have a single provincial council in the north, with Tamil-speaking areas in the east annexed to the north through a redemarcation of boundaries. Mr. Amirthalingam, however, emphasizes that before any final settlement is reached, the militants will have to be brought into the discussion. Amirthalingam's group is expected to meet in India with militants and Indian government representatives.

Officially, Tamil rebels insist on having one autonomous Tamil homeland. But analysts believe that most of the rebels could be persuaded to accept a settlement short of complete autonomy. Though divided among themselves, the four main rebel groups have agreed to take a ``unilateral approach'' to the final proposals.

Meanwhile, India has pressured the groups not to hamper the peace process through public statements or guerrilla offensives.

Some analysts say that this pressure will harden once a final agreement is reached. They believe India could make guerrilla operations difficult by cutting off support coming from Tamil Nadu. But others say that Indian Prime Minister Rajiv Gandhi can apply pressure only up to a point without jeopardizing his political interests in Tamil Nadu.

Most analysts agree that Jayewardene is genuinely interested in a political solution.

If the proposals are finalized, Jayewardene is confident he will have no problem getting parliamentary approval without the need for a national referendum. But if the talks fail, analysts believe the situation will quickly deteriorate.

Says a Western diplomat: ``There has got to be a large measure of good will and accommodation on both sides.'' CHART: Sri Lankan snapshot

Population: 15 million; 74 percent Sinhalese (descended from Aryan stock of northern India), 18 percent Tamil (related to the Dravidian population of southern India), and 8 percent other minorities, including Moors, Europeans, and Veddah aborigines.

Religion: About two-thirds Buddhist, 19 percent Hindu, 8 percent Christian, 7 percent Muslim. Most Sinhalese are Buddhists, while most Tamils are Hindu.

Government: Independent member of the Commonwealth since February 4, 1948. Under present constitution (adopted 1978), Sri Lanka abandoned British-style parliamentary system in favor of a ``Gaullist'' presidential-parliamentary system. System concentrates power in hands of president.

Economy: Most Sri Lankans engage in agriculture, producing rice, tea, coconuts, and rubber. Industry limited by lack of natural resources.