BBC’s Colombo correspondent Susannah Price described the fall of the town as the worst setback for the Army in over a year. The LTTE advanced further west and south and took Ambankamam, Olumadu, Nainamadu and strategic Mankulam town on 5 October. Kanagarayankulam, seven miles south, fell a day later and the Tigers proceeded to capture Puliyankulam, seven miles further south. In their advance accompanied by intense artillery fire, the Tigers destroyed 21 military camps capturing huge quantity of weapons.
Earlier in the month, the Army made extensive preparations for major operations in the Vanni. On 14 October, the military launched Operation Watershed I from Ambankamam. Despite torrential rains troops advanced north-east, but came under artillery fire between Ambankamam and Muthyankaddu Tank, three miles north of Olumadu.
In two days of fighting 36 soldiers died and another 364 were wounded. The ICRC say in a press release that 32 bodies of Tigers were handed over to the LTTE in the Vanni on 16 October and three more such transfers took place. The Army also began Operation Rela Pahara II (Wave Assault) in Paranthan, south of Elephant pass on 15 October killing nine Tigers. Operation Watershed II was launched on 28 October and troops advanced from Olumadu northwards to link-up with Muthayankaddu. The Tigers shelled a field hospital within the Elephant Pass camp on the same day killing a soldier and wounding 21 others.
The London-based Tamil Information Centre warned in late October that the operation would be a risk to refugees and called on international agencies and governments to device a plan of emergency preparedness. There are 376,000 people in Tiger-held areas in the Vanni and over 80% of them are internally displaced. Senior state officers, the Government Agents say food shortages in the region continue and prices of fuel and milk food have risen. Renewed fighting in the Vanni will make the situation worse.
In mid-October, the LTTE imposed a ban on farmers selling rice produced in Vanni districts to the government. In the last 18 months, government officers purchased the rice required for refugees from local farmers at Rs 1,050 ($15) a 50 kilo bag. Following the Tiger ban, officers say rice will have to be brought from Colombo and other essential goods may have to be reduced.
In Vavuniya, ten civilians were injured in a grenade attack at the bus station on 9 October. Two electricity pylons were damaged with bombs at Thavasikulam, two days later.