(Updates with rebel claim that air force jet hit)

By Simon Gardner

COLOMBO, April 30 (Reuters) - Sri Lanka's Tamil Tigers threatened on Monday to launch more aerial attacks after their nascent air wing hit oil facilities near the capital at the weekend. The military claimed it killed 14 insurgents overnight.

Royal Dutch Shell's local arm said it had temporarily closed its main storage facility 12 miles (20 km) north of Colombo after Sunday's pre-dawn raid damaged its fire-fighting system. The Anglo-Dutch oil major said its storage tanks were intact and that supplies had not been disrupted.

Sri Lankan shares fell on Monday while the local rupee hit a new intraday low against the dollar as Sunday's raid, the rebels' third in a month, sent jitters through the markets.

"The Sri Lankan military, especially the air force, are adamantly trying to prove they will always seek a military solution," Tiger military spokesman Rasiah Ilanthiraiyan told Reuters in a telephone interview from Kilinochchi, the rebels' northern stronghold.

"So we have no other way than to take our own measures," he added. "There will definitely be more. We have no choice other than striking back."

Tiger media coordinator Daya Master later said Tiger fire had hit an air force jet during an air raid over rebel territory in the north on Monday, and that residents had seen the craft spewing smoke. The air force dismissed the report as propaganda.

Sunday's rebel air attack triggered panic in the capital as air defences plunged Colombo into darkness and tracers streaked through the night sky, forcing bars packed with cricket fans watching their side battling in the World Cup final to close abruptly.

Ilanthiraiyan said the timing was a coincidence.

AIRLINES FRET

International airlines Cathay Pacific and Emirates both suspended flights in and out of Colombo on Sunday at a time when many flights are already just half full because tourists are wary of visiting during a conflict that is escalating and spreading.

Singapore Airlines said on Monday it had shifted its daily night-time departure to after midday for security reasons. Tiger air raids have been conducted at night to help avoid detection.

Sri Lanka's military, which is pushing on with a declared plan to destroy the Tigers' military assets in a bid to end a two-decade civil war that has killed around 68,000 people since 1983, vowed to wipe out the fledgling rebel air wing.

"This is a new dimension," said military spokesman Brigadier Prasad Samarasinghe. "We are trying to get some more advanced systems."

"To neutralise them either in the air or on the ground ... is a requirement."

Samarasinghe said troops had killed 14 Tiger fighters in a series of clashes on Sunday in the northern districts of Mullaithivu, Jaffna and Mannar, where fighting is now focused after the fall of the rebels' eastern stronghold.

The Tigers, who want to carve out an independent state for minority Tamils in the north and east, said they had no details of any such clashes. The foes often contradict each other's accounts of incidents in a parallel propaganda war.

Analysts say the Tigers' home-grown air wing, a tiny force made up of small propeller planes adapted to carry bombs, nevertheless poses a threat that should not be taken lightly. Some experts are dumbfounded at how the rebels have managed to fly away safely after each sortie.

"Although the LTTE's acquisitions appear primitive, they have clearly demonstrated through their last four sorties the helplessness of the government to protect its own airspace," said Iqbal Athas, an analyst with Jane's Defence Weekly.

"The air force still doesn't appear prepared to meet with the air threat from the LTTE." (Additional reporting by Ranga Sirilal)

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