Sri Lanka's military has been unable to push into Tamil Tiger strongholds in the north due to the threat of monsoon rains and a lack of manpower, defence officials and analysts say.
The new capability of the Tamil Tigers to carry out airborne attacks has not only made them a rarity among the world's guerrilla outfits but has also badly shaken an entire country.
Sri Lanka's defence ministry has acknowledged that the Tigers may be operating at least five light aircraft, used in three headline-grabbing raids against military and civilian targets over the past month.
The Tigers already possess an effective naval unit known as the Sea Tigers.
The February 2002 truce has sparked a demand for credit with more people borrowing either to rebuild their homes, set up business or buy goods such as solar-electricity panels.