COLOMBO (Reuters) - Government troops and Tamil Tiger rebels have fought pitched battles in Sri Lanka`s northern Wanni region where the military is trying to capture a key highway, military officials said on Sunday. They said the two sides exchanged heavy artillery and mortar fire on Saturday in areas around Mankulam, the last major town on the northern highway held by the rebel Liberation Tigers of Tamil Eelam (LTTE). A Defence Ministry spokesman told Reuters advancing troops had destroyed an LTTE bunker on Saturday as they moved ahead to capture fresh territory. A ministry statement said troops continued to dominate areas ahead of their defence lines, but the LTTE claimed they had forced the soldiers to retreat. No fresh fighting was reported on Sunday. A statement from LTTE`s London office received on Sunday said the rebels had beaten back the military after a 48-hour battle on one of the two flanks. It said the army`s efforts to move ahead on another front were thwarted by a powerful LTTE counterattack. The LTTE statement said the rebels had surrounded and attacked a section of the retreating soldiers, and more than 50 soldiers were killed and many more wounded. Independent confirmation of events is not possible as journalists are not allowed to visit the war zone. The military is trying to capture the highway connecting Vavuniya with Kilinochchi, further north. The offensive, codenamed Operation Jayasikuru (Sure of Victory), began last May. The highway, if captured, will open a land route to the former rebel stronghold of Jaffna, which the army captured in 1996. Thousands of soldiers and rebels have been reported killed or wounded in the campaign for the highway, the longest by the Sri Lankan military in the 14-year war. The LTTE have been fighting since 1983 for a separate homeland for minority Tamils in Sri Lanka`s north and east. The government said in 1996 more than 50,000 people had died in the war. Since then thousands more soldiers and rebels have been reported killed.