Sri Lanka's Election Commission on Friday announced that the Presidential elections will be held on January 26 next year, with incumbent Mahinda Rajapaksa expected to face a challenge from former Army chief Sarath Fonseka, architect of the military victory against the LTTE.

Hundreds of young men and women chanted "death to the dictator," confronting police wielding batons and firing tear gas in the capital on Thursday as opposition activists sought to revive street protests despite authorities' vows to "smash" any new marches.

"He has taken a decision to withdraw. We will officially announce it tonight or tomorrow in a statement," the aide said, asking not to be named.