Tamil Tigers killed seven people and injured 17 in an attack on a Pakistan embassy convoy today, the military said.
The blast, less than a mile from Sri Lankan President Mahinda Rajapakse's residence, came after the Liberation Tigers of Tamil Eelam (LTTE) said Air Force jets bombed an orphanage in the northeast, killing 43 schoolgirls and injuring 60.
Four military personnel and three civilians were killed in the explosion, which bomb squad officials said was caused by a fragmentation mine inside a three wheeler taxi.
"Definitely it's an LTTE attack to the Pakistan ambassador's car but they missed and the backup vehicle got caught," a military spokesman said.
A Pakistani foreign ministry spokeswoman said the ambassador was unhurt.
The LTTE report on the bombing of the orphanage could not be immediately confirmed. Unicef is sending a team to the site of the orphanage.
The government accused the rebels of shelling civilian areas in the northern Jaffna peninsula. The military said it had launched air strikes on identified LTTE targets such as camps in the northeast.
Aid workers estimate around 100,000 people have been displaced during three weeks of fighting. Dozens are confirmed dead, and many fear the eventual death toll will be far higher.
The rebels, who ignored a government demand to surrender, are furious at President Mahinda Rajapakse's rejection of their demands for a separate ethnic homeland for Tamils in the island's north and east.