(Updates with analyst comment, details)

By Simon Gardner

COLOMBO, Dec 17 (Reuters) - Sri Lanka may outlaw the Tamil Tigers if the rebels continue to mount large-scale attacks, President Mahinda Rajapaksa said on Monday, a move that would put the prospect of renewed peace talks further out of reach.

"One or two more attacks, we have no option," Rajapaksa told reporters after hosting a Christmas gala in the capital Colombo. "(We will) have to ban."

"There is a limit to our patience, our tolerance."

He said he would seek peace while continuing to fight the Tigers and did not view the two as mutually exclusive.

"We are convinced peace is possible only if we can weaken the LTTE militarily," Rajapaksa said.

The Liberation Tigers of Tamil Eelam (LTTE) have been outlawed as a terrorist group by a host of nations, including the United States, Britain and the European Union, following a series of attacks and assassinations.

A previous government lifted a ban on the Tigers in 2002, paving the way for direct peace talks that later collapsed.

"A ban would be a signal that the government's intention is a military solution and it is closing the door to talks," said Jehan Perera, an analyst with non-partisan advocacy group the National Peace Council.

"The LTTE will refuse to come to talks until the ban (if imposed) is lifted."

The Tigers, who are seeking to carve out an independent state in the island's north and east, were not immediately available for comment.

They have already dismissed a long-delayed government bid to build a consensus devolution package for minority Tamils that Rajapaksa says is still in the works.

Reclusive rebel leader Velupillai Prabhakaran said last month he had no hope of a political settlement with the government in the renewed civil war after the chief of his political wing was killed in an air force bombing raid.

The government has said it aims to destroy the Tigers militarily and evict them from territory they control in the far north. Analysts expect the war, which has killed around 70,000 people since 1983, will grind on for years.

Nordic truce monitors say well over 5,000 people have been killed in near-daily air raids, bombings and land and sea battles since early last year alone. (Editing by Robert Woodward)

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