Sangakkara and Jaywardene have helped Sri Lanka to 166 for two after the bowlers limited Australia to 316 all out.
Hosts Sri Lanka in 'strong situation' after day two
Kumar Sangakkara needs 39 more runs today to mark his 100th Test match with a century after leading Sri Lanka's fight back against Australia.
The elegant left-hander will resume on 61 today, and continue his third-wicket partnership, already worth 69, with Mahela Jayawardene, the right-hander with whom he has shared so much success with over the years.
The pair, who have scored over 18,000 Test runs between them, helped Sri Lanka to 166 for two after the bowlers limited Australia to 316 all out. With eight wickets in hand and two such prolific batsmen at the crease, the home side will be confident of securing a first-innings lead in their bid to level the series.
"You can't get a better stepping stone than this," Rumesh Ratnayake, the Sri Lanka coach, said. "166 for two is fantastic so we are in a very strong situation."
Ratnayake said his team learnt from the defeat in the first Test, before drawing the second Test. "I felt we were much more aggressive, much more specific in what we wanted to do," Ratnayake said.
Sri Lanka's position could have been better had Tharanga Paranavitana, the opener, not been dismissed in the final session for 46, caught by Ricky Ponting at short extra-cover off seamer Mitchell Johnson. His opening partner, Lahiru Thirimanne, was bowled by Peter Siddle, for 28.
Mike Hussey had earlier top scored with 118 in Australia's innings, registering his second century of the series.
"If we can bowl very well, restrict them and take the wickets, it's going to put us in a great position to win," Hussey said. "If we can't get rid of Kumar and Mahela, they are going to give themselves every chance to win the Test match."
Australia resumed the second day on 235 for five. Shaminda Eranga, the Sri Lanka seamer who took four for 65 on his debut, led a spirited Sri Lanka attack in the morning session, taking two wickets as Australia's last four wickets fell for just 51 runs.
Eranga quickly put the pressure on the visitors with the fifth ball of his first over of the day when he had Brad Haddin caught behind for 35 runs.
Left-arm seamer Chanaka Welegedara took two wickets in successive balls, having Johnson caught by Rangana Herath and Siddle caught by Paranavitana at slip. Two overs later, Trent Copeland endured the same fate, this time Mahela Jayawardene taking the catch.
Eranga then ended the Australia innings by bowling Hussey after the left-hander had faced 178 balls and smashed two sixes and 12 boundaries. Hussey scored his 15th Test hundred, following up his top score of 142 in the second Test and 95 in the first.