COLOMBO, Sri Lanka - Sri Lankan forces overran another village Monday and moved closer to seizing a strategic base from the Tamil Tigers, but concerns are mounting for the hundreds of thousands of civilians living in the rebels' shrinking territory.

The government has chased the rebels out of much of their de facto state in the north in recent months -- taking their administrative capital of Kilinochchi last week -- but the offensive is complicated by the presence of an estimated 300,000 civilians in rebel territory.

As civilians increasingly get in the way of the battle, it could become difficult for the government to fight on without causing an unacceptable loss of life, human rights activists and some western diplomats said.

The government says it has no intention of giving up its recent momentum but will do everything it can to avoid civilian casualties.

"We are taking the utmost precautionary measures," said defence spokesman Keheliya Rambukwella. He declined to outline what those precautions where.

Government troops Monday captured the rebel-held town of Oddusudan, which sits at an important crossroads leading to the Tamil Tiger stronghold of Mullaittivu, according to military spokesman Brig. Udaya Nanayakkara.

Troops also moved closer to capturing the Elephant Pass stronghold, a strategic chokepoint just south of the government-controlled Jaffna peninsula, the military said. Seizing Elephant Pass would cut off the rebels' heavily fortified front-line on the peninsula from the rest of their remaining territory.

The rebels are fighting to create an independent homeland for minority Tamils, who have suffered decades of marginalization by governments controlled by the Sinhalese majority. Some analysts say this is the military's best chance ever of defeating the rebels and ending the 25-year-old civil war, which has killed more than 70,000 people.

Mano Ganesan, an opposition legislator, called on both sides "to conduct their war in a way that the civilians are not affected or punished" and asked that a group of observers from all political parties be allowed in the war zone.

Last month, Human Rights Watch accused the rebels of preventing civilians from fleeing the area under their control. The New York-based group also accused the government of arbitrarily detaining and mistreating the estimated 1,000 civilians who fled across the front-lines.

While the military has avoided large-scale civilian casualties in its latest offensive, reports of civilian deaths have grown in recent days.

The Tamil Tigers said in a statement that six civilians were killed and 20 injured in artillery attacks and air strikes in the Mullaittivu district Friday. On Sunday, artillery attacks wounded 14 more civilians, they said.

Independent confirmation of the casualties was not available because the government bars journalists from the war zone and from entering rebel territory.

Despite the growing threat, there has been no mass movement of civilians out of the area.

Large-scale civilian casualties could spark pressure on Sri Lanka from neighbouring India -- which has a large ethnic Tamil population of its own, said Paikiasothy Saravanamuttu, executive director of the Centre for Policy Alternatives think-tank.

"At the present moment (officials) are of the mood that, 'We've got them on the run let's finish it,' " he said. "But they must be aware that 'finishing it' be done in a way that does not provoke outside intervention."