News of the incident was first relayed by the Liberation Tigers of Tamil Eelam (LTTE) and officially confirmed by the International Committee for the Red Cross (ICRC) on Thursday.

However, a defence ministry spokesman maintained the air force had bombed only ``identified LTTE targets''.

The incident took place near Puthukudiyiruppu, a well-populated civilian centre close to the LTTE's Mullaithivu headquarters, at about 10.30 am on Wednesday.

The LTTE said in a statement faxed from its London office that Israeli built K-FIR bombers of the Sri Lankan Air Force (SLAF) launched ``a sudden and brutal attack'' at a market place located next to a refugee settlement. Besides the loss of lives and injuries, more than 60 refugee huts went up in flames in the bombing, it said.

The LTTE said the area was strewn withpieces of flesh after the bombing and alleged it was ``a retaliatory attack for the humiliating military debacle at Mannar this weekend where the Sri Lankan army suffered heavy losses in the ground battle''.

The LTTE's clandestine radio Voice of Tigers gave out names of those killed and injured. Many of them were over 50 years old.

Military spokesman Brigadier Sunil Tennekoon denied the SLAF had killed civilians. He said there were two bombing missions around 11 am on Wednesday on identified LTTE targets and that both had been successful.

He said one was over a 32-acre coconut estate 4 kms outside Puthukudiyirppu where a LTTE camp was located. ``Our pilots confirmed that the bombs fell on the coconut estate,'' he said.

The other area targeted by the K-FIRS on Wednesday was some distance away from Puthukudiyiruppu. Asked whether the bombers could have mistakenly targeted civilian areas, Tennekoon said ``so far they have always been correct''.

However, a spokesman for the ICRC here said he couldconfirm that 21 civilians had died ``consequent to an air-strike yesterday''. He said 15 were killed on the spot and 41 were injured, but six of the injured succumbed in the Puthukudiyirrupu hospital.

The spokesman said ICRC was notifying families of the injured and dead who lived outside the Vanni.

``ICRC deplores the fact that the site of the air-strike was in a predominantly civilian area causing unnecessary suffering and destruction,'' he said, adding that the organisation would be taking up the issue with the Sri Lankan government.

Tamil parliamentarian Jospeh Pararajasingham expressed his outrage at the incident in a strongly-worded letter to President Chandrika Kumaratunga, pointing out that the practice of a government bombing its own civilian areas was ``a crime and barbaric act'', unheard of anywhere else except Sri Lanka. Apart from the bombing of a church in July 1995, this is the most serious incident involving civilians since the present war began four years ago.