The M23 and its Rwandan allies have captured the mining town of Nyabibwe in South Kivu province, about 100 kilometres from the capital Bukavu, security and humanitarian sources said.
According to the same sources, the anti-government armed group began intense fighting against the Democratic Congolese armed forces in the early hours of Wednesday.
After taking Goma, the capital of the neighbouring province of North Kivu, last week with Rwandan forces, the M23 unilaterally declared a humanitarian ceasefire that was supposed to have been in effect since Tuesday.
However, after Wednesday's raids, the Democratic Congolese government spokesman Patrick Muyaya told the Agence France-Presse (AFP) that the ceasefire had been a sham.
UN spokesman Stéphane Dujarric told reporters on Tuesday that there were reports of heavy fighting in South Kivu, although there was "no information that M23 is approaching Bukavu".
The M23 rebels are supported by about 4000 troops from neighbouring Rwanda, according to UN experts.
The government of the Democratic Republic of Congo, a neighbouring country of Angola, has declared itself open to talks to resolve the conflict, but wants the dialogue to take place within the framework of previous peace agreements, which it has been accused of failing to comply with by Rwanda and the rebels.
Regional organisations, mediating countries such as Angola and Kenya, the UN, the European Union and the international community are trying to find a diplomatic solution to the crisis, fearing a regional conflagration.
Regional leaders are meeting in Tanzania on Friday and Saturday to discuss the conflict.
