Since late Thursday, residents had been told to stay home and the main road was closed in Jaffna town on the Jaffna Peninsula, home to most of the island's minority Tamils.
But the curfew was lifted Friday afternoon after the situation eased, said military spokesman Brig. Daya Ratnayake.
Police said the violence was sparked Thursday when a soldier's gun accidentally went off while he was trying to get a haircut at a barber shop near Jaffna, 300 km north of the capital, Colombo. A shop employee died in the incident and the soldier was arrested.
Furious residents on Thursday burned tires, hurled stones at military vehicles and seized police Superintendent Charles Wijewardene -- who arrived to investigate the incident. His body was later found lying on the street, covered with stab wounds.
He was the most senior police officer to be killed since the government and Tamil rebels signed a cease-fire three years ago.
Top Sri Lankan police officials flew to Jaffna on Friday to review the situation.
President Chandrika Kumaratunga has condemned Thursday's killings and called for calm and restraint, her office said in a statement issued Friday.
The statement said Kumaratunga had ordered a thorough investigation into the violence, and punishment for the culprits.
Jaffna -- home to most of Sri Lanka's 3.2 million Tamils -- has seen two decades of fighting between government troops and the Tamil Tiger rebels.
The guerrillas want an independent Tamil homeland, claiming discrimination by the Sinhalese majority in this country of 19 million people.
The government and rebels signed a Norway-brokered cease-fire in February 2002, but it has come under various strains, and peace talks have stalled.
The rebels also complain that the heavy military presence in Jaffna has hampered the resettlement of Tamils displaced by the civil war.
