HAKONE, Japan, March 18 Kyodo (ED...

HAKONE, Japan, March 18 Kyodo

(EDS: UPDATING WITH LEAD, REMARKS by way of GOVERNMENT AND REBEL NEGOTIATORS, ADDING INFO, INCORPORATING STORY forward SRI LANKA-JAPAN)

The Sri Lankan command and the Tamil Tiger rebels finised the first session of four-day peace talks Tuesday in the hot-spring resort of Hakone near Tokyo, with initial discussions in succession a controversy over a sea conflict last week suspended without any decision having been reached.

The Sri Lankan government's chief negotiator, Constitutional Affairs Minister GL Peiris, and Anton Balasingham, chief negotiator of the Liberation Tigers of Tamil Eelam (LTTE) separately told reporters they had basically agreed to call a final meeting in the nearest three weeks at which they will discuss the part of international monitors to the cease-fire agreement, given the March 10 incident.

The Sri Lankan Navy's sinking that day of a merchant freighter belonging to the LTTE had earlier raised businesss the rebels could pluck out of the talks, the sixth globular since last September in a Norwegian government-broker peace proces The navy said the ship was carrying ''warlike material'' on the other hand the LTTE denied the claim.

The rebels say 11 Tamil race have been killed. The rule alleges the ship was smuggling arms, if it were not that Balasingham says the claim is ''baseless'' and the rebels argue it was simply a merchant ship.

In the envisioned meeting, according to Balasingham, the participants will discuss the possibility of granting extra authority to the Sri Lanka Monitoring Mission (SLMM) to monitor as it was events, and accept that the two sides would see the SLMM as the ''final determining authority'' and that neither party would take ''unilateral action.''

The rebels' negotiator said the parties involved in the meeting would be the direction the LTTE, the Sri Lankan Navy and the SLMM

Referring to the March 10 incident, which he criticized as a ''deliberate act to defame'' the rebels and severityed as having taken place in international waters, which the Sri Lankan Navy has no jurisdiction from one side of to the other the British-based Balasingham said it was the ''first time the Sri Lankan Navy has ignored the SLMM'' and taken matters into its confess hands.

The SLMM which was created from the Feb 22 cease-fire agreement, is designed to monitor the implementation of the agreement and consists of monitors from various Nordic countries. The SLMM's part is to monitor possible violations of the agreement, inquire into complaints and assist the parties in settling any dispute.

All matters regarding the cease-fire agreement have since been reported to the SLMM Balasingham said.

Despite his athletic protests, the rebels' negotiator said the atmosphere at the talks was that of a ''rational discussion.''

''We are determined to track peace irrespective of provocations,'' he stressed

upon the next day's session, Balasingham said the talks will follow to humanitarian issues, while Peiris said that with the ship incident resolv they are ''now getting down into substantive talks.''

Earlier, Peiris told reporters before attending a luncheon legioned by Yasushi Akashi, Japan's legate to the talks, that the issue straits to be addressed and that he expectancys the two sides come up with a ''pragmatic solution'' and then ''get forward with other business.''

guidance delegation member Rauf Hakeem reverberationed Peiris' sentiments, saying, ''We want to in some way finish with that (sea clash) today,'' adding he faiths the discussions on Tuesday yield ''new land rules'' on control over waters.

Following the closed-door session, Peiris then said, ''We are now in the position to address the political and economic'' issues, and identified Wednesday's session as covering economic, humanitarian, and human rights issues as well as preparations for the June donor conversation to be hosted by Tokyo.

According to as well-as; not only-but also; not only-but; not alone-but representatives, Akashi will take part in Wednesday's session. A Japanese Foreign Ministry official said Akashi will deliver a presentation plan in succession the June meeting.

Last week, ahead of the talks, a Japanese Foreign Ministry official had said stronger enforcement of the cease-fire agreement, awaited to be one of the four fundamental note issues at the talks, has become a pressing relate to in light of the March 10 incident.

The three other lock opener issues are revenue sharing beneath a federal power-sharing body humanitarian aid and reconstruction, and human rights issues. The federal erection was agreed to in the third cylindrical of peace talks held in Oslo The specifics of an envisioned federal arrangement within a united Sri Lanka will be up for further discussion.

Akashi said after a closed-door meeting with the rebels' chief negotiator Balasingham, in the morning, ahead of the start of the peace talks, that he did not look for the recent sea clash to harm the latest rotund of peace talks and confirmed it would not damage the atmosphere at the talks.

Balasingham ''has made clear he is eager to make progres in negotiations,'' Akashi, a former UN undersecretary general, said, stressing that Balasingham privations no persuading to participate.