In this paper, we analyze the False Timeout (FTO) problem that TCP flows suffered in OBS networks and propose Interleaved Traffic Splitting (ITS) to solve the problem. We show that the collision loss of ACK bursts may also cause FTO, which has been neglected by previous researchers. As TCP Sack is designed to recover from multiple packet losses, we find that a Sack flow can recover its data transmission without triggering retransmission timeout if packet loss is not too severe. This suggests limiting the number of packets carried by a single burst. In ITS, this is achieved by carrying out a parallel, interleaved burst assembly process at each ingress OBS edge router. We show that ITS tackles the FTO problem caused by the loss of both data and ACK bursts. Unlike other existing approaches, the ITS scheme requires only modification to the assembly/de-assembly mechanisms implemented at the edge routers. It does not add complexities to the network management or the router design. In this paper, both analytical and simulation results are presented to demonstrate the performance improvement of ITS. Our analysis further shows that the use of two parallel bursts is optimum for ITS.