SRI LANKA'S defence establishment is becoming increasingly worried over Tamil rebel movements that violate a three-week-old truce, while peace talks appear to have reached a stalemate. Military sources said that large numbers of armed cadres of the Liberation Tigers of Tamil Eelam (LTTE), had returned to the island's eastern province, the area they were driven out of by government troops two years' ago. 'We are extremely concerned over the prevailing situation. The LTTE appears to be making use of the cease-fire to regain lost ground,' a senior military officer told the South China Morning Post yesterday. He said that since the truce came into effect on January 8, more than 400 LTTE cadres had infiltrated the area and more than 200 truce violations by the rebels had been reported in the eastern Batticoloa and Amparai districts. A government spokesman said they were waiting for a response from the rebels to set a date for the next round of peace talks. The Government had proposed starting discussions early this month to work out a solution to devolve power to minority Tamils in the north and east. But the Tigers demand that the Government begin reconstruction and lift an economic embargo on the war-ravaged north prior to the next round of talks. Analysts believe the LTTE's delay in entering political negotiations is a ploy to hold up the peace process. Government forces had largely succeeded in the east when the truce began. The northern peninsula of Jaffna is controlled by the LTTE. Elusive LTTE supremo Prabhakaran Velupillai admitted recently on the clandestine Voice of Tigers radio that the rebels had lost control of the eastern province. President Chandrika Kumaratunga has accused the Tigers of being unfair in their demands, which she labelled as 'excessive'. Government sources said they would be forced to resume the war in the event of a breakdown in the peace process.