By Hereward Holland and Finbarr O'Reilly

RUTSHURU, Congo, Nov 22 (Reuters) - Tutsi rebels staged a rally in a captured eastern Congolese town on Saturday in a show of strength and defiance after an offensive against government forces over the past month.

"We've not come here to fight you. Do not be afraid of me," Nkunda told around 3,000 local people, mainly men, sheltering from the fierce tropical sun under a sea of umbrellas at an overgrown soccer ground in Rutshuru.

Nkunda's rebels seized the town in a campaign launched last month that has displaced 250,000 people, thrown already chaotic government forces into disarray and prompted the U.N. Security Council to send 3,000 more troops to its biggest peace force.

This week Nkunda's fighters left frontline positions but held onto Rutshuru and other towns in North Kivu province.

After arriving in a luxury white Lexus SUV with tinted windows, Nkunda danced with local children to music blaring from loud speakers. Around the crumbling stadium walls over 100 rebel soldiers stood guard with automatic rifles and rocket launchers.

Nkunda introduced to the crowd his new local administrator, Julius Impeze Panga, who wore a black bow tie, crumpled blue suit and a lapel pin bearing the logo "Rebels for Christ".

Rebel soldiers from Nkunda's National Congress for the Defence of the People (CNDP) prevented Reuters journalists from interviewing members of the crowd during the rally.

Nkunda first launched his rebellion in 2004, saying he wanted to protect his Tutsi community from attacks by Hutu armed groups, including former Rwandan rebels who fled over the border to Congo after taking part in their own country's 1994 genocide.

He said this year he wants to liberate all Congolese from the rule of President Joseph Kabila, who won Congo's first free polls in 2006 after a devastating war and governs the vast nation from the capital Kinshasa, over 1,500 km (950 miles) away.

"If you want to be ruled by strangers, refuse us. If you want to be ruled by your children, accept us," he told the crowd from behind a table decorated with pink plastic flowers.

CHILD SOLDIERS, KILLINGS

Human rights campaigners have accused both CNDP and pro-government Mai Mai militia groups of killing civilians and recruiting child soldiers during the past month's fighting.

Around 70 km (45 miles) to the south of Rutshuru, residents of the provincial capital Goma complain of armed robberies and assaults by drunken government troops. The conflict has driven 1 million North Kivu people from their homes in the past two years.

Nkunda's men led a bewildered-looking boy of around 10-12 years old onto the stage at Saturday's rally in Rutshuru.

They said the boy, wearing dusty trousers and a T-shirt with a "Slam dunk" basketball logo, was a Mai Mai fighter.

"We don't have any problem with children. We want them to be looked after and re-educated," Nkunda said, before appealing to any non-governmental organisation to take the boy in.

The rebels also hauled up before the crowd a man accused of stealing mattresses, bicycles and other household possessions onto the stage before dragging him away out of sight.

At a makeshift camp outside a U.N. peacekeeping base nearby, around 1,000 refugees are living in shelters, some half-built, afraid to return to homes in Rutshuru town or nearby villages.

Some have fled repeatedly as first the CNDP, then Mai Mai, then CNDP again advanced on Rutshuru town in the past month.

"After the CNDP came back they killed many men, Mai Mai, IDPs (internally displaced people), young men," Nizeman Chiza, a man living outside the U.N. base with his family, told Reuters.

"CNDP take the women in the night. They are taking people out of the city and taking them into the bush," he said.

Nkunda denies the abuses, and accuses Mai Mai fighters of targeted attacks on civilians. He also blames Rwandan Hutu fighters who he says are fighting in alliance with Kabila's troops. (Writing by Alistair Thomson; Editing by Louise Ireland)

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