A statement from the Tigers said 241 rebels, including 68 women, had also died in the fight for the Mullaitivu army camp, regarded as the bloodiest battle in years.
An army official said the claim that government troops were surrounded was exaggerated. He estimated casualties at 300 killed and 200 wounded, and said more than 300 rebels had been killed.
Western diplomats said the latest upsurge of violence probably stemmed from the army's capture in April of the northern town of Jaffna, headquarters of the Tamil Tigers. The fighting has dashed government hopes that peace was at hand after the fall of Jaffna.
The main supply route to Jaffna is by sea, and western diplomats say that if Mullaitivu falls to the rebels, it could hit a vital link to Jaffna.
Reinforcements have been battling to reach the base since it was stormed by about 3,000 separatist guerrillas last week. The rebels sank a naval vessel with some 40 men aboard on Friday, and downed an air force helicopter on Saturday.
The latest attacks come a week before the 13th anniversary of the anti- Tamil riots that sparked the ethnic conflict in which the government says more than 50,000 people have died. State-run radio said the fighting had forced President Chandrika Kumaratunga to cut short a private visit to London.
The Tigers said their leader, Velupillai Prabhakaran, was personally supervising the assault on Mullaitivu, which it said was fully under rebel control. The army has denied this claim.Reuse content