Mr Thiruchelvam, chairman of the London-based Minority Rights Group, was blown up by a suicide bomber who rode close on a scooter and threw himself on to his car as it was blocked in traffic in the centre of the capital. Mr Thiruchelvam's driver and bodyguardwere wounded. Though no one claimed responsibility, it was assumed to have been the work of the hardline Tamil Tigers (LTTE) organisation, opposed to any accommodation.
The death of Mr Thiruchelvam, a lawyer, fits into a policy of eliminating any Tamil rival who favoured a compromise, involving devolution rather than the separate state demanded by the Tigers.
In the meantime, the government has given as good as it got, arbitrarily arresting suspects and letting loose the army to conduct brutal reprisals against anyone believed to be an LTTE sympathiser. Myriad cases of torture and extra-judicial killing have been identified and condemned by rights groups, but to little avail.
Last night R Sambandan, head of the moderate Tamil United Liberation Front, to which Mr Thiruchelvam belonged, called the killing "a terrible loss ... a tragedy not merely for the Tamil people but for the country as a whole."
In London, Alan Phillips, the Minority Rights Group's international director, described him as "totally committed to the injustices suffered by Tamils in Sri Lanka through peaceful but radical change".
Almost 60,000 people have been killed or "disappeared" since the Tigers took up arms in 1983. For all the repression against them, they still control wide areas of the north and east and, as yesterday's ambush showed, retain the ability to strike at will.
To break the deadlock, President Chandrika Kumaratunga has put forward a draft Bill setting up strong regional councils, including one that would be run by the Tamils.
However, the proposals, which Mr Thiruchelvam helped prepare and which are due to go before parliament next month, risk satisfying no one.
With its latest brazen murder the LTTE has signalled its undying hostility. At the other end of the political spectrum, the main opposition United National Party, whose support is essential if the measure is to become law, continues to insist on a strong unitary state. That view is shared by dominant Sinhalese nationalists, and the influential Buddhist clergy.
The one alternative is direct talks between the government and the rebels.
But Mrs Kumaratunga says the rebels must first forswear their goal of a separate state, and accept a fixed timetable for negotiations. After yesterday's attack, neither step looks remotely likely.