Peace negotiations continue, and the cease fire is holding. But the  major stumbling block is the Tamil demand for the partition of the island into Tamil and Sinhalese states. Sinhalese nationalists oppose this and are willing to go back to war to prevent partition. The Tamil rebels are, so far, more willing to discuss some form of autonomy. If this issue isn't resolved, the war could resume. Although everyone is tired of two decades of fighting, and the rebels were weakened during the savage fighting in the last year, the cease fire is allowing the rebels to rebuild their military power.