Congo rebels say in control of eastern border town KINSHASA (Reuters) - Rebels in Congo said on Friday they had seized the eastern town of Bunagana on the border with Uganda after days of fierce fighting with government troops during which a U.N. peacekeeper was killed and thousands of residents displaced. More than 2,000 civilians had crossed the border into Uganda the past few days to escape the bloodshed, at least 2,200 more had been uprooted and 600 Congolese soldiers had also fled over the frontier, Ugandan Red Cross and military officials said. Congo's north Kivu province has been swept by violence since late March after hundreds of ex-rebels defected from the army in support of a rebellious general, Bosco Ntaganda, who is wanted by the International Criminal Court for suspected war crimes. The mutiny risks dragging the vast, loosely governed central African state back into war and damaging fragile relations with Rwanda, which has repeatedly denied allegations that the rebels are receiving cross-border support. The resurgence of fighting in eastern Congo has displaced over 200,000 people since April, according to U.N. estimates. "The city of Bunagana and its surroundings are now under the control of our forces after a failed counter-offensive against our positions by the government troops," said Colonel Makenga Sultani, coordinator of the so-called M23 movement. In a statement, Sultani urged several thousand residents who had fled into Uganda to return home and the U.N. peacekeeping mission to remain impartial in the conflict. A spokesman for MONUSCO, the U.N. mission in mineral-rich Congo, said an Indian U.N. peacekeeper was killed during heavy fighting on Thursday, but could not confirm whether the rebels had taken the town. Officials of the government of the Democratic Republic of Congo was not immediately available for comment. An official of Uganda Red Cross said that more than two thousand people had crossed the border into Uganda in the past few days to escape the intense fighting. "It (the fighting) was only 40 meters away from our border so the people took off to come to the Ugandan side," said Kevin Nabutuwa Busima, assistant director of disaster management for the Uganda Red Cross. Nabutuwa said they received 1,765 new arrivals at the transit camp yesterday and 500 new arrivals on Friday. "Two thousand-two hundred people are the border entry point on the Uganda side waiting to see how the situation looks in Congo before deciding whether to go back," he added. A Ugandan army officer told Reuters the 600 Congo government soldiers who had fled to Uganda had been "disarmed as required and we're processing them for refugee status ..."Also there has been a dramatic surge in civilian refugees in the past few days," Captain Peter Mugisha said. Rwanda has denied allegations in a report by U.N. experts in June that provided the strongest evidence yet that officials of President Paul Kagame's government were providing military and logistical support to armed groups in Congo. The United States called on Rwanda to stop supporting armed rebel groups in Congo after the U.N. investigation implicated senior Kigali officials. Congo President Joseph Kabila last week blamed the conflict on "dark forces, national and foreign" during a speech on national television, but did not mention Rwanda by name. Kabila called off annual independence day celebrations on June 30 as a mark of respect for the victims of the fighting. Reporting by Elias Biryabarema and Jocelyn Edwards in Kampala; additional reporting and writing by Bate Felix; editing by Mark Heinrich