(Updates with rebel counter-claim, fresh quote)

By Simon Gardner

COLOMBO, March 30 (Reuters) - Sri Lanka's military and Tamil Tigers each accused the other on Friday of killing civilians with mortar bombs in the island's east overnight, but truce monitors said it was too dangerous to check who was to blame.

The army accused the Tigers of killing eight civilians, including two young girls, by firing at an army camp in the eastern district of Batticaloa. The Tigers said it was army mortars that killed the civilians as they tried to recover abandoned belongings, saying 9 people died.

The military said five soldiers were killed in a separate roadside bomb ambush in the north on Friday, the military said.

"They have fired at two villages. Only in the morning we have entered the area and we found eight people killed, including a 1-1/2-year-old and 7-year-old, both of them girls," said military spokesman Brigadier Prasad Samarasinghe. He said 18 civilians were wounded.

"Five soldiers were also killed and one was wounded when they have hit troops taking meals in a tractor to a road clearing patrol in (the northern district of) Vavuniya," he added

The attacks were the latest in a series of deadly incidents this week, including the Tigers' first-ever air strike near the capital, a suicide rebel attack on an army base and a naval battle the military said killed more than 20 insurgents.

Samarasinghe said the rebels had fired from a strip of Tiger-held jungle east of Batticaloa called Thoppigala, where insurgents regrouped after being evicted in recent months from an eastern stronghold covering an estimated 600 sq km (230 sq miles).

Troops have surrounded the area from where they say the latest attack was launched and were seeking to choke off supplies and rebel movements. The two sides were exchanging sporadic artillery and mortar fire.

President Mahinda Rajapaksa's ethnic Sinhalese-majority government is trying to destroy the Tigers militarily, despite repeated calls from the international community to respect a 2002 ceasefire that holds on paper but has broken down on the ground.

WAR SEEN ESCALATING

The Tigers, who want to carve out an independent state for minority Tamils in the north and east, have warned of a bloodbath. Analysts fear that the two-decade conflict that has killed around 68,000 people since 1983 will escalate.

Civilians continue to pay a heavy price, with hundreds killed and around 155,000 displaced by fighting in the east in recent months alone.

"The situation has gone way out of control," said Thorfinnur Omarsson, spokesman for the unarmed Nordic Sri Lanka Monitoring Mission, adding it was not safe enough for monitors to visit the site of the mortar attacks in Batticaloa

"Too many civilians are getting caught in the line of fire," he said. It's high time both sides respected what's left of the ceasefire agreement."

Extrajudicial killings, abductions and abuses have mushroomed, and rights activists have repeatedly called on both sides to halt a conflict international lenders estimate shaves around 2.0 percentage points off economic growth each year.

"It will be Tamil civilians who have to bear the brunt of this ongoing war," said Ahilan Kadirgamar of expatriate rights advocacy group the Sri Lanka Democracy Forum.

"Unless there is a political solution that addresses Tamil aspirations, and we move in the direction of peace, it's also going to be very difficult to address human rights and the humanitarian concerns," he added, saying both sides were committing abuses.

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