(Recasts with ceasefire)

By Joe Bavier

BUKAVU, Congo, Sept 6 (Reuters) - United Nations mediators announced a ceasefire on Thursday between Democratic Republic of Congo's army and the forces of a renegade general whose advance towards an eastern town forced thousands of refugees to flee.

The announcement by the U.N. mission in Congo (MONUC) followed nearly two weeks of fighting in volatile North Kivu province in which rebels loyal to General Laurent Nkunda have battled U.N.-backed government troops.

"A ceasefire has been facilitated by MONUC between Nkunda and the government troops. It's been in progress since around 1 p.m. this afternoon," said Sylvie Van Den Wildenberg, U.N. spokeswoman in North Kivu.

Nkunda's military commander, Bwambale Kakolele, said his leader had accepted the MONUC proposal. "We want peace, we are returning to our positions," he told Reuters.

The Congolese army's top commander in North Kivu would not immediately confirm the ceasefire.

The deal was announced as thousands of Tutsi fighters loyal to Nkunda appeared to have turned the tide on government forces, and were pressing ahead towards the provincial capital Goma, sending thousands of civilians fleeing.

Nkunda forces had neared Sake, just 20 km (12 miles) from Goma, earlier on Thursday.

"Nkunda tried to take Sake but U.N. peacekeepers were able to convince his troops to withdraw," Van Den Wildenberg said. "They also made it very clear another advance on Sake would not be tolerated," she added.

The worsening fighting in eastern Congo has been a setback to efforts by Congo's President Joseph Kabila, who won landmark elections late last year, to achieve lasting peace across the vast, former Belgian colony, scarred by a 1998-2003 war.

Thousands of fleeing civilians packed the road towards Goma on Thursday carrying what possessions they could.

"There is a massive number of people on the road to Goma, and they are all saying they are fleeing fighting," Aya Shneerson, head of the U.N. World Food Programme in North and South Kivu, told Reuters by telephone from just outside Sake.

CONFUSED FIGHTING

A Reuters witness saw hundreds of retreating government troops with the fleeing refugees. Military sources with Congo's 17,000-strong U.N. peacekeeping mission said it was unclear who now held the upper hand in the fighting, after an army offensive drove Nkunda out of several key positions since last week.

Earlier on Thursday, Nkunda, who has accused the government of backing Rwandan Hutu rebels against his own Tutsi people, had called for outside mediation to broker a ceasefire.

"We want to negotiate, but the government doesn't... We want mediation from the international community, from credible countries like South Africa, even Rwanda, Uganda, or Kenya," his commander, Kakolele, said.

U.N. peacekeepers used attack helicopters in November to halt an advance by Nkunda's men on Goma in operations that killed hundreds of rebels. In recent weeks, the mission has given logistical assistance to Congolese forces.

Rwandan Foreign Minister Charles Murgande, visiting the Congolese capital Kinshasa for the first time in three years on Monday, offered to mediate talks with Nkunda but Congo declined.

In January, Rwanda helped broker a ceasefire that brought thousands of Nkunda's fighters into mixed army brigades in what was billed as a step towards ending his three-year insurgency.

The deal was a failure and the former renegades soon unleashed a campaign of terror, forcing an estimated 224,000 civilians to flee their homes since the beginning of the year.

U.N. and humanitarian agencies believe between 10,000 and 40,000 people have fled fighting in recent weeks, raising the total number of displaced in North Kivu to around 700,000.

AlertNet news is provided by