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International help key to peace - PM

COLOMBO, Thursday (Reuters) International support at an aid meeting next week is key to a Sri Lankan peace process struggling to regain momentum after a breakdown in talks, Prime Minister Ranil Wickremesinghe said on Thursday.

He said the government and Liberation Tigers of Tamil Eelam (LTTE) were not far apart over a LTTE demand for an interim administration in the North and East of the island, a sticking point on which the Tigers have hardened their position.

"I feel the world community's support is essential at this stage. The LTTE also looks to that - without that financial support we cannot reconstruct the North and East together," Wickremesinghe told Reuters.

"I would say that despite the present developments, the fact the world community is engaged on it means that we will be able to get back on track once we meet," he said at his Temple Trees residence just a block from the Indian Ocean.

The peace bid to end 20 years of war that has killed 64,000 has been frozen since April when the LTTE suspended talks and pulled out of the donor conference set for Tokyo next Monday, saying the pace of rebuilding in Tamil areas was too slow.

They have been fighting for a separate Tamil state, but say they now want a negotiated solution to the conflict.

They have demanded that an interim administration be set up in the North and East, parts of which are already under their de facto control, something the government says would be unconstitutional.

But Wickremesinghe said ways may be found to get around that if the rebels agree to meet.

"As far as the government is concerned, certainly we are looking at an appropriate interim administrative structure. From what I can see the differences are not that large," he said.

"But it is an issue which has to be discussed, I don't think just by exchanging letters or notes we will be able to come to a conclusion," Wickremesinghe said. The two sides have been exchanging letters through Norway, which brokered a truce that has mostly held since February 2002.

The donor conference is expected to raise $3 billion over three years for rebuilding efforts, although the breakdown in talks may mean donors add stronger conditions to the aid.

Wickremesinghe said that, because of a lack of infrastructure in the North and bureaucratic bottlenecks in the South, a new system was being designed to handle development. "Certainly, looking at the country as a whole, we are looking at a completely new structure for implementation of projects," he said.

Wickremesinghe said the fact that no one was talking about a return to fighting - four previous peace bids ended in renewed bloodshed - showed the durability of the process that was kickstarted when he was elected in December 2001.

"It shows the strength of the process, the commitment of the international community, the commitment of the government and the LTTE... and more than anything else, that everyone has heard the message of the people - 'we don't want war'.

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