Mayor Sarojini Yogeswaran was meeting with area residents when the two assassins entered her house and fired about 10 shots. The area is 185 miles north of the capital, Colombo.
Ms Yogeswaran, 63, had turned down government offers of protection and insisted on having no bodyguards. Her husband Vettivelu, a Tamil lawmaker, was assassinated by suspected Tamil separatists in the Colombo in 1989.
The government blamed Ms Yogeswaran's assassination on the Tamil rebels who have been fighting since 1983 for an independent homeland in northern and eastern Sri Lanka.
The rebels accuse the Sinhalese majority of widespread discrimination in education and jobs. Tamils comprise 18 per cent of the population of 18.5 million, while Sinhalese make up 70 per cent.
Ms Yogeswaran was elected mayor in January against opposition by the main rebel group, the Liberation Tigers of Tamil Eelam. The poll, the first in Jaffna since 1983, established local councils that will be given more autonomy under a plan the government hopes will end the war. - AP