The ashes of rare Tamil manuscripts in the burned-out hulk of the public library here symbolize the deep racial divisions that form a nasty undercurrent through this otherwise peaceful Indian Ocean island nation.

The attacks on the Tamils, who make up about 20 percent of the population, by the majority Sinhalese took at least a dozen lives during the summer and left the two communities more bitterly split than before.

The Tamil residents here want to leave as is the once-beautiful library, manuscripts -- ashes and all -- along with the pulled-down statue of a young Tamil hero, as reminders of the violence that flared in this northern Sri Lankan seaside city for three days starting May 31. The violence is blamed on the largely Sinhalese police, who even top government officials acknowledge ran amok after four of their comrades were killed, possibly by "Tamil Tiger" terrorists seeking a separate state.

The police burned the office and presses of a Tamil-language newspaper published here and the home of the member of Parliament from Jaffna, 47-year-old Vettivelu Yogeswaran, who had to flee for his life over the back fence with his wife, Sorogini. He said he was on the phone trying to reach President J. R. Jayewardene for help when he saw a police officer shoot the lock off the front gate.

"I had to wrench him away from the telephone," Yogeswaran's wife recalled. "Finally when the shot came he ran. I said he had to save our lives."

Yogeswaran believes he was singled out because he has served as lawyer for Tamil youths accused of terrorism against the police and has brought complaints of police mistreatment of Tamils to higher government authorities.

Probably in a delayed reaction to the violence in the north, Sinhalese ran wild in racially mixed areas of eastern Sri Lanka last month. At least a dozen Tamils were killed, scores of Tamil-owned shops were looted and burned and there were reports of gang rapes of Tamil women.

All is quiet now, as President Jayewardene has extended the state of emergency, and armed troops on duty here run occasional patrols through the streets of this city.

But the bitterness runs deep and more and more Tamils -- including those who once were considered moderate on the issue -- now loudly voice the cry of eelam (freedom) for a separate Tamil state that would take a V-shaped wedge in the northeast and northwest from Sri Lanka, which would lose one-third of its territory.

Prime Minister Ranasinghe Premadasa has ruled out the demand for a separate state, and a committee of high-level government officials and the leaders of the Tamil United Liberation Front, the major opposition party, are sitting down for peace talks.

Nonetheless, some diplomats here fear that things have gone too far for a reconciliation of the two communities, who have been battling each other in one way or another for 2,500 years. There are signs that the more moderate politicians of both the Tamils' party and the ruling United National Party have been dragged too far from the center by extremists of both sides.

The opening of this ugly racial sore tarnishes the image Sri Lanka is trying to project as an island of tranquillity in an effort to attract foreign tourists and industrial investment from abroad.

Fanning the flames of the deep-seated splits between the two communities, racist anti-Tamil wall posters -- "Your destruction is at hand. This is the country of us Sinhalese," said one -- began appearing on government buildings in mid-July, and Appapillai Amirthalingam, leader of the Tamils' party minority in Parliament, charged they are the work of radical elements in the ruling party.

Jayewardene gave some credence to that charge when he threatened to resign at one point because "some members of my party have spoken in Parliament and outside words that encourage violence and the murders, rapes and arson that have been committed."

Since that speech to party members, it appears that agitation from within the ruling party has eased off if not ceased entirely.

But the idea of eelam seems to have gained support here, where the original "Ceylon Tamil" population is centered. Tamil United Liberation Front candidates from Tamil areas won 11 seats in Parliament, making them the official minority behind Jayewardene's party, on a platform calling for a separate state. Moreover, in June, Liberation Front members swept district development council elections in this region and other largely Tamil areas.

It was the tensions leading to these elections, Tamils believe, that caused the arson that struck here. Ruling party politicians were determined to get at least four seats on the district council, and even government officials here acknowledge that they resorted to widespread election fraud in an attempt to achieve that goal.

The Tamil United Liberation Front vote, however, was so overwhelming that despite open ballot-box stuffing, no ruling party candidate won.

It is the Ceylon Tamils, who have lived in this area for centuries, that support eelam.

But there are other Tamils in this country, known as "estate" or "tea Tamils" since their ancestors were brought here from India in the last century by the British rulers to work on the tea plantations. They are in many ways stateless people -- either Sri Lankan nor Indian -- and generally take no position on eelam.

It is these "tea Tamils" who suffer most when racial violence flares in the country since they live largely in mixed areas and do not have the protection of being in the majority in their home territory.

There are few signs here or in Colombo that the longstanding grievances of the Tamils are being attacked by the government.

Tamil claims of discrimination in police and Army recruitment are dismissed, and government officials deny that a system of "standardization" effectively keeps Tamil youngsters from going on to higher education that is available to less qualified Sinhalese.

Anandatissa de Alwis, minister of state for information, broadcasting and tourism, insisted that Tamils for a long time made up a majority of the civil service and pointed to Tamils in high positions in his office as evidence of a lack of discrimination.

Nonetheless, what the Tamils perceive as discrimination in opportunities for higher education rankles them, leaders here said, causing the frustration among youth that leads them toward acts of terrorism against the government such as a holdup in July of a police station near here in which two police officers were killed and the armory was looted.

Furthermore, it is this traditional Tamil veneration for education that makes the burned-out library such as symbol of Sinhalese injustice. B. Shivanandan, director of the burned-out Tamil paper Eelanadu, pointed out that with the exception of the politician's house the Sinhalese police only went after the newspaper, the library and bookstores -- all seats of learning.