Nadaraja Kandiah recalls with gratitude the stranger who welcomed the five members of his family when they fled the fighting in Kilinochchi six years ago. Others had to take shelter under trees.

"We carried whatever we could take and went for cover. There was no time to worry about property and businesses when we saw our friends and neighbors dropping dead," Kandiah said, his eyes reddening. "It was a rain of fire from ground and air."

Kandiah and many of his neighbors have finally returned, and begun to rebuild a town destroyed during 19 years of war between ethnic Tamil rebels and forces of the Sinhalese-dominated government. Their hopes are high thanks to the cease-fire accord of February 2002 and peace talks that are underway.

In 1983, the rebels started their insurgency with hopes of creating a separate state for the 3.2 million Tamils on this island off the southern tip of India. Tamils accuse the Sinhalese majority of discrimination in education and jobs. More than 64,500 people have died in the conflict.

In Kilinochchi, 170 miles north of the capital, Colombo, people were displaced three times by battles over their town.

Kandiah, 60, fled in 1996 when government troops captured the town during a big offensive. In 1998, the rebels fought an equally bloody attack to recapture Kilinochchi and made the town their political headquarters.

Returning after the cease-fire signing last year, Kandiah used his savings to build a tin-roofed, clay-walled grocery. A shopkeeper before the war, now he sells onions, candies, biscuits, cigarettes and other goods that were not freely available during the government's seven-year economic blockade of rebel-held territories.

He built a decent dwelling by local standards on the foundation of his destroyed ancestral home. But most houses erected by the returnees are made of coconut leaves or clay; some are covered only with plastic sheets.

"My family's house was destroyed in the war and no one helped us to rebuild. We did it by ourselves in whatever way we could," said Kandasamy Ravindran, 24.

Finding jobs became the major challenge for most displaced people. Kandiah worked on farms. Ravindran took advantage of the cease-fire to travel south to the capital to find work. Some people fled to Europe, but the less affluent were left to starve.

The region around Kilinochchi boasted fields rich with rice and vegetables before the war. Now, the fields are strewn with land mines.

Still, rice cultivation has almost doubled from 27,170 acres last year to 49,400 acres this year thanks to the cease-fire.

Many more displaced people want to return home from refugee camps or crowding in with friends and family. But the presence of land mines is a major problem, said an official, speaking on condition of anonymity because Sri Lanka's government bars officials from providing information to journalists.

The official said 11,500 displaced families have returned and 2,600 of those have built houses in areas where land mines have yet to be removed. There is no estimate of how many mines were planted.

About 260 civilians in Kilinochchi district have lost their legs to mine explosions and the number would exceed 2,000 if rebels were included, the official said.

The government has given some families money to build temporary shelters. But the official said $1.8 million is needed to resettle 27,600 more families and only $305,260 is available.

Seventy of the district's 102 schools were destroyed by fighting, so most of the 29,600 students must study in temporary sheds, the official said, adding that almost all the children in primary school are malnourished.

"We study under the shade of trees because our school buildings are roofless because of aerial bombings," said Selvarasa Thuvarakan, 11.

People in the area have lived without electricity and telephones for more than a decade. Battery-powered radios are the sole links to the outside world.

Twenty-three local and foreign humanitarian groups are trying to help, but their work pales in comparison to the needs, the official said.

The government's rehabilitation minister, Jayalath Jayawardena, said his ministry has completed a survey of needs in the area and is working on a five-year development plan.

"We are all happy about the changes that are taking place. There are no planes flying above and dropping bombs," said Kandiah. "But our only concern is whether this will last."

Fighters of the Liberation Tigers of Tamil Eelam pass behind a 6-year-old girl during a street pageant in Kilinochchi to commemorate a female rebel who died during the civil war. A cease-fire accord has allowed displaced families to return to the town.