The top leader of the Tamil Tigers has not left Sri Lanka and is still leading the "freedom struggle", the rebels’ political leader has said.
B Nadesan told the BBC by telephone that reports Velupillai Prabhakaran had fled were "malicious propaganda". He promised the rebels would fight on.
Fears for civilians are growing – the UN says dozens are dead or injured.
Sri Lanka’s army has pushed the rebels from their strongholds. Mullaitivu, their last major base, fell on Sunday.
There is no way of confirming claims from either side in the conflict zone as independent journalists are barred.
‘Liberation war’
Speaking exclusively to the BBC Sinhala service, Mr Nadesan rejected claims Mr Prabhakaran had fled.
"It is malicious propaganda – our leader is still with us – our leader is giving leadership to our freedom struggle. He is with our people," he said.
Mr Nadesan also said the Tigers would not lay down arms until the freedom and dignity of their people were guaranteed.
He shrugged off recent military setbacks which have seen the loss of the key bases of Kilinochchi, Elephant Pass and Mullaitivu.
He said: "In a liberation war it is normal for a force to lose territory and regain the same and achieve freedom. In the past we have withdrawn many times and bounced back to achieve big victories."
When asked why the rebels would not lay down their arms and talk to the government, Mr Nadesan said: "We took up arms to safeguard our people. We need a guarantee of living with freedom and dignity and sovereignty… until that, we will not come to that point."
Mr Nadesan also accused the army of shelling civilians in areas the government had designated safe zones.
Military spokesman Brig Udaya Nanayakkara told the BBC the army had no need to fire at civilian areas.
Brig Nanayakkara said the rebels were firing from the safe zone "but we don’t engage them".
‘Crisis’
The district director of health for Kilinochchi region, T Satyamurthy, also spoke to the BBC and said that between 1 and 25 January, 145 civilians had died due to the conflict in the region and more than 650 had been admitted to hospitals.
Dr Satyamurthy, the most senior government health official in the district, said that on Monday 27 civilians had been killed and 76 wounded when about 1,000 shells fell on the Udayarkatta and Nattangandal hospital complex in Mullaitivu district.
Dr Satyamurthy said the shelling came from the south "where the SLA [Sri Lankan army] is camping".
"We don’t have any staff or medicine – security is a major problem, so we can’t work properly," Dr Satyamurthy said.
Brig Nanayakkara insisted the army had "no connection whatsoever with these civilian deaths".
"The military has not directed any attacks towards the safe zone. It is declared for the civilians to come and seek protection."
He said all government officials in the region were "making statements under the pressure from terrorists. I can clearly say that they are making these statements to save their lives".
The UN has also expressed concerns about civilian deaths, saying dozens had been killed.
Resident coordinator Neil Buhne told the Associated Press news agency the situation was desperate.
"There have been many civilians killed over the last two days. It’s really a crisis now."
There are thought to be about 250,000 civilians in the area in which the rebels are still operating.
The army took Mullaitivu town – the last major Tiger base – on Sunday.
The military says it is now advancing into the 300 sq km (115 sq mile) triangle of land in which the Tamil Tigers are still operating.
Mr Nadesan said the rebels hold twice that area.
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