The Sri Lankan President's latest offer to end the country's four-year ethnic war is the most significant peace proposal yet. But opposition from hard-liners on both sides of the conflict - Tamil and Sinhalese - could dampen prospects for an early peace accord.
The offer, made by President Junius Jayewardene late last week, concedes several key demands of Tamil rebels:
Semi-autonomy for the Northern and Eastern provinces, merged under a single governing council.
Recognition of Tamil as an official language and Tamils as a distinct community.
A general amnesty for Tamil ``political prisoners.''
But the proposal's call for Tamil militants to lay down their arms within a week of the accord's signing has been greeted by ``reservations'' from the militants.
In an effort to hammer out details, Indian officials met for the third day yesterday with Tamil separatist leaders in New Delhi.
In Colombo, the Sri Lankan capital, the mood among Tamils was ``cautiously optimistic,'' according to one Tamil source there.
But in Ampala, some 125 miles away, riot police faced a demonstration by 3,500 Sinhalese Buddhists protesting the proposals.
Why Mr. Jayewardene conceded the merger demand, after years of rejecting it, is unclear. A Sri Lankan official says it is possible the President decided the government cannot afford to continue its military campaign against Tamil rebels.
``Perhaps the government has finally appreciated the fact that it's a no-win situation,'' the source says. To retain control of the portion of the northern Jaffna Peninsula now in government hands ``requires adequate human resources, which we just don't have,'' he adds.
Numerous allegations of government violation of human rights have also brought international diplomatic and economic pressure to bear on Sri Lanka. Finance Minister Ronnie De Mel recently admitted that the country could easily have obtained twice the $625 million it received from donor countries this year - if a peaceful settlement had been agreed upon.
Indian Prime Minister Rajiv Gandhi, who has played an intermediary role for mroe than two years, is negotiating on behalf of the Tamil groups. He is reportedly trying to ensure that the plan for disarming the militants does not scuttle the proposed accord.
Several Tamil rebel leaders - including Velupillai Prabhakaran, leader of the largest rebel group, the Liberation Tigers of Tamil Eelam - were flown in from Jaffna by an Indian Air Force helicopter for talks with Mr. Gandhi over the weekend.
Despite the snags, preparations are being made for the signing of a ``memorandum of understanding'' between the Sri Lankan and Indian governments, according to Indian and Sri Lankan sources. Earlier reports had said the signing might be as early as tomorrow. But sources say this may not now be possible.
If the details are ironed out, and Gandhi flies to Colombo for the signing - as many speculate he will - it would mark a dramatic shift in diplomatic relations between the two countries.
Only last month, ties appeared to be near total breakdown over an Indian ``relief'' mission to Jaffna, which has been the scene of a massive government offensive and Tamil counteroffensives since late May. The area's estimated 850,000 population reportedly sustained heavy civilian casualties and destruction of property. A relief-supply air drop by India on the peninsula was condemned by Sri Lanka as a violation of sovereignty.
Sources say that India will likely act as ``guarantor'' for the memorandum ``in substance and on the ground.'' Reports say the govenment proposes a cessation of hostilities, followed by a mutual process of demilitarization. This requires the Sri Lankan Army to withdraw from Jaffna to pre-offensive positions and the surrender of arms by Tamil militants in a very short time frame.
Tiger leader Prabhakaran has reportedly said the groups will not lay down arms as laid out in the proposals, while saying that the Tigers are ``still prepared for a negotiated settlement.''
The degree of autonomy for the province has not been worked out so far. According to sources, it would operate on a semi-federal basis, allowing decentralized powers through state governments.
There is reportedly a proviso in the India-Sri Lanka memorandum for a referendum in the Eastern Province to determine whether to contnue the single provincial council setup. In its earlier rejections of the merger demand, Colombo had always claimed that Muslim and Sinhalese residents - who make up 54 percent of the Eastern Province - opposed such a move.
Tamil militants have expressed concern that the proposed referendum will make the merger of the two provinces ``conditional and possibly temporary.''
Analysts point to two main hurdles that remain. Jayewardene's Cabinet itself is believed to be divided on the merger issue. Whether Jayewardene can ride out domestic opposition from the majority Sinhalese groups remains to be seen.
The second, and perhaps bigger obstacle, is the situation on the ground, says an Indian analyst. It is far from certain whether Colombo will make additional concessions to Tamil groups in the demilitarization process.