The European Union, the US, Japan and Norway have urged Sri Lanka's Tamil Tigers to surrender.
In doing so the Liberation Tigers of Tamil Eelam (LTTE) can avoid more deaths, including the thousands of civilians trapped in the war zone, they said in a joint statement.
"There remains probably only a short period of time before the LTTE loses control of all areas in the north," they added.
"The LTTE and the government of Sri Lanka should recognise that further loss of life - of civilians and combatants - will serve no cause."
Earlier, three people were killed and ten wounded after artillery shells hit a packed hospital in the war zone for the fourth time in two days, the International Committee of the Red Cross (ICRC) said.
That brings the death toll in two days of shelling at the hospital in the northern area of Puthikudiyiruppu to 12, with 30 more wounded.
The region is inside the small wedge of jungle where Sri Lanka's surging military has surrounded the LTTE separatists.
The military is fighting to finish a war that started in 1983 and is now one of Asia's longest-running.
Sri Lankan President Mahinda Rajapaksa last week gave the Tigers 48 hours to free thousands of civilians trapped inside the 115 sq miles of jungle still held by the rebels, which the LTTE ignored.
The government had promised safe passage for that time, but on Monday said it could not guarantee the safety of anyone still living among the rebels, unless they enter an army-demarcated no-fire zone.
"People are on the move because they are looking for a safe place. But there is no safe place," ICRC spokeswoman Carla Haddad said.
Aid agencies say around 250,000 civilians are trapped in the Tiger-held area. The government says the number is closer to 120,000.
The military and the rebels again traded blame for the shelling.
"We don't fire shells on that area. It must be LTTE which are firing shells as they are desperate," military spokesman Brigadier Udaya Nanayakkara said of the attack on the hospital.
A pro-rebel website said the shells were fired by the military "throughout the whole day on Monday from all directions into civilian refuges. At least 100 civilians could have been killed or maimed in the indiscriminate barrage".
It is nearly impossible to verify accounts from the war zone, off-limits for journalists except on carefully guided tours.
In a statement, Foreign Secretary David Miliband called again for a truce to let civilians move out.
He said: "I very much regret the LTTE's failure to respond positively to the Sri Lankan government's offer of safe passage for civilians.
"The need for a humanitarian ceasefire that is fully respected by both sides is already urgent."
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