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The United Nations said a peacekeeper in Congo was killed by an exploding shell as rebels allegedly backed by Rwanda made major advances in the country's volatile east, taking a border crossing into Uganda and threatening a strategic town.

Panicked residents were fleeing the town of Rutshuru on Friday night amid reports that the rebels had advanced within shelling distance, according to a statement from the North Kivu Civil Society. Fears were heightened by the evacuation of U.N. and independent aid agencies, followed in the late afternoon by the retreat of Congolese army soldiers, it said.

The Indian peacekeeper was killed overnight on Thursday as fighters from the M23 rebel group attempted to take the town of Bunagana, said Madnodje Mounoubai, the United Nations spokesman in Congo.

"I confirm the death of a peacekeeper of Indian origin working for the United Nations mission in Congo," he said. "He was hit by shrapnel from an exploding shell during an attack by the M23 mutineers in Bunagana last night."

Congo's two-year-long peace was shattered in April when an army unit led by Gen. Bosco Ntaganda defected.

They fled into the bush, where they regrouped as the M23 rebels, named for the date in March 2009 when the former rebels signed a deal with the Congolese government, a deal brokered as the army was in full retreat and the dissidents threatened to take the eastern provincial capital of Goma. Under the accord, the rebels were integrated into the very army they have now deserted once more.

After controlling mountaintops along Congo's border with Rwanda, the rebels earlier this week made a push and seized the strategic village of Jambo, cutting access to the border crossing of Bunagana into Uganda and Rwanda. Then overnight Thursday, they took Bunagana, according to a spokesman for the rebels as well as a resident of the town who requested anonymity fearing reprisal.

"We took the town of Bunagana this morning at around 6 a.m. but we do not plan to stay," said M23 spokesman Vianney Kazarama, who was reached by telephone in eastern Congo. "We plan to leave our police there for security, but we are going to return to our initial positions in the surrounding hills. ... We do not need to take the towns or the villages even if we control several now. We are only asking the government of Kinshasa to respond to our demands, which are known by all."

A United Nations report says that the rebels are led by Ntaganda, who is wanted by the International Criminal Court, and backed by Rwanda — a charge Rwanda denies.

On Thursday, U.S. Ambassador R. Barrie Walkley said he had issued a strong message to Rwanda. "I'm coming from Kigali, where I passed on a forceful message that outside support to the M23 group must stop, must cease," said the recently appointed U.S. special representative to the Great Lakes region that includes Rwanda and Congo.

The notoriously ill-equipped Congolese army has been struggling to contain the rebellion. On Friday, the spokesman for the Ugandan army Capt. Peter Mugisa said that around 600 Congolese soldiers had sought refuge in Uganda after an intense battle with the rebels.

Mugisa were in the custody of the Ugandan military and did not want to go back home yet, fearing they might be massacred by the rebels they were sent to fight.

Analysts fear that the new conflict could once again drag Congo into the cycle of violence it had only recently started to stem. In the country's lawless east, entire wards have been set up to treat rape victims, one of the many atrocities that have become widespread as a result of years of fighting.

At the United Nations in New York, Secretary-General Ban Ki-Moon said in a statement that he regrets the peacekeeper's death and called for an "immediate end to all violence perpetrated by armed groups."

The rebellion has caused more than 200,000 people to abandon their homes and flee, some displaced inside Congo others across the borders into Rwanda and Uganda. The U.N. World Food Program is asking for an additional $45 million to feed them.

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Associated Press writer Rodney Muhumuza contributed to this report from Kampala, Uganda.