In May — after more than a decade of continuous warfare — the Liberation Tigers for Tamil Eelam (LTTE) and the Sinhalese-dominated government of Sri Lanka will attempt to work out a peace settlement. Sri Lanka is an island with a population of 19 million in an area the size of Tasmania, Australia. Though sharing cultural affinities with the Sinhalese majority (74 per cent of the population), the Sri Lankan Tamils (12 per cent) have a different language and script. They allege systematic discrimination over the last 50 years. Since 1976 their leaders have sought to establish a separate state — called Eelam — in the northern and eastern provinces of the country. Since the early 1970s, when some Tamil youths formed underground revolutionary organizations geared for armed struggle, extremists from both sides have fed off each other. Sinhalese pogroms directed against Tamils in southern areas in 1977 and 1983 — both obscene episodes — helped swell support for Eelam among Tamils both inside and outside the country. In the mid-1980s several Tamil organizations competed to lead the struggle for Eelam. LTTE members set themselves apart: they carried cyanide capsules displaying their readiness to die rather than be captured, a commitment that drew admiration in Tamil circles. Since then the LTTE has ruthlessly eliminated leaders of rival Tamil groups and assigned squads, including suicide-bombers, to kill Sinhalese leaders or set off massive vehicle bombs. By the 1990s they were the most powerful voice for Tamil ‘liberation’ and ran a de facto state in parts of the north and east that some observers have characterized as ‘fascist’. Velupillai Prabhakaran is the authoritarian head of this military regime and has cult status embodied in the title thalaivar (leader). He commands an efficient army and a navy with speedboats that can outrun government warships. Critically, the LTTE has also become a transnational corporation with many tentacles, including a shipping company, devoted to moneymaking, propaganda and logistics. The LTTE was recently proscribed by the US as a ‘terrorist organization’. This act of de-legitimization and the events flowing from 11 September have induced the LTTE to bend with the wind. A general election in the southern parts of Sri Lanka in late 2001 gave them the opportunity to talk quietly with the United National Party, which secured a majority for its coalition in December last year. Sufficient trust developed for both parties to initiate a ceasefire. This in turn enabled Norway to resume its previous role as mediator. What then is likely to happen in the peace talks? The LTTE could use the talks, as it did in 1990 and 1995, as breathing space for rearmament directed towards a new military thrust and escalated warfare. Alternatively, it could temper its demands and settle for regional autonomy that would leave it as a one-party dictatorship in the Tamil domain. But if talks collapsed under the weight of the intractable issues attached to such a settlement, this too would generate war at a worse level. Given that more than 63,000 lives have been lost so far over 25 years in this particular conflict, this is a desperate prospect.