Sri Lankan President Mahinda Rajapakse on Thursday asked Tamil Tiger rebels to lay down arms and find a negotiated solution to the country's ethnic separatist conflict.
In presenting his 2007 budget to the parliament, the president said his government is committed to peace and ready to consider all reasonable solutions to the minority issues.
"It is only the LTTE (Liberation Tigers of Tamil Eelam) which has still not entered this process... I once again request the LTTE to give up violence altogether, surrender arms," Rajapaksa said.
Rajapakse said he was grateful to the international community for their efforts to revive the island country's peace process, saying his government supported efforts of foreign donors to revive the peace process which has been stalled since April 2003.
The president placed the country's economic growth next year at around 7.5-8.0 percent, up from the expected growth rate of 7.0 percent in 2006.
He said spending for 2007 would be 597 billion rupees (about 5. 97 billion U.S. dollars) and revenues 584 billion rupees (about 5. 84 billion dollars), leaving a deficit of 13 billion rupees (about 130 million dollars).
The president proposed increases in income tax and taxes on a wide range of goods and services to level the deficit.
Rajapakse didn't give details of the country's defense spending for next year, but officials had earlier said defense budget would increase around 45 percent from 2006 levels, considering the escalation of violence between the government and the LTTE.
Official figures show that more than 3,300 people have been killed in the conflict since the president came to power a year ago.