The attack is the latest proof of the Tigers' ability to strike far from the war zone, where troops have rapidly encircled them in just 87 sq km (34 sq miles) of jungle and are fighting to end a separatist war that began in 1983. The capital is some 350 km (217 miles) to the south-west.
The military said one plane was gunned down in anti-aircraft fire over the, while the other was shot and crashed into the Inland Revenue building in Colombo's Fort area near the main port. The thundering of anti-aircraft guns erupted over Colombo's streets and tracer fire and spotlights lit up the skies, darkened after authorities cut the power when one plane was spotted on radar flying down the east coast.
"We have shot one down in Katunayake and found the wreckage and the body of the pilot," defence spokesman Keheliya Rambukwella said, referring to the international airport. Later, he said plane wreckage had been found at the tax building.
Hospital officials said 40 were injured, and the military said two people were killed at the Inland Revenue building. "I saw a fireball entering the Inland Revenue building and the building caught fire," a security guard at the neighbouring TransAsia luxury hotel told Reuters Television.
Rambukwella had said earlier the plane had dropped a bomb. "The Inland Revenue was not a bomb. It was the plane which got shot and crashed into the Inland Revenue building," Rambukwella said later. He said he had been in the harbour at the time and saw the building get hit.
WRECKAGE SHOWN State television showed the wreckage of the plane downed at the airport in a marsh right outside the military base in the complex, its green and brown camouflaged body wrenched apart and its fuselage riddled with bullet holes.
Nearby lay the body of the pilot, dressed in the LTTE's trademark Tiger stripe combat fatigues. It was the tenth sortie by the Liberation Tigers of Tamil Eelam's (LTTE) "Air Tigers" since they launched in March 2007 what is believed to be the only combat air fleet operated by an insurgent group or any group on US and EU terrorism lists.
Although most of LTTE's territory has been taken by a rapid military advance that has put Sri Lanka's government in striking distance of a conventional victory, none of the Tigers' small single-engined planes has been found by troops.
Sri Lanka's military has said the Tigers are flying three single-engine Zlin-143 light aircraft, believed smuggled onto the island in pieces and reassembled. During the rapid military advance that has now hemmed the Tigers into 87 sq km (34 sq miles), troops found at least seven airstrips, but no planes. The Sri Lankan war, the longest-running conflict in Asia, has killed 70,000 people since it began in earnest in 1983.
Human Rights Watch on Friday urged an end to the "war against civilians" trapped in the fighting. The New York-based watchdog said civilians casualties had risen dramatically in the past month to around 2,000 dead and 5,000 wounded, with the rebels shooting fleeing civilians and the military bombarding populated areas. About 14,000 Tamils protested in Geneva on Friday against Sri Lanka's drive to crush the guerrillas, who are fighting for an independent homeland for their ethnic minority group.