U.N. Secretary-General Kofi Annan says he is "extremely concerned" about reports that rebel troops have captured the eastern Congolese town of Moliro.

In a statement, Mr. Annan Saturday deplored the development, which took place after the Security Council appealed for a cease-fire. He has instructed the U.N. mission in Congo to be prepared to deploy military observers to the area.

Earlier Saturday, the Congolese government again accused Rwandan troops of attacking Moliro. Rwanda, which has soldiers in eastern Congo backing rebels there, has denied attacking the town.

Rwandan-backed rebels said Saturday they had taken Moliro without foreign help.

On Friday, France's U.N. ambassador joined the Congolese government in accusing Rwanda of a military attack on Moliro. Ambassador Jean-David Levitte called the move a "serious resumption of war" in eastern Congo.

Peace talks in South Africa aimed at ending the two-and-a-half year war in Congo have been disrupted by the resumption of fighting in eastern Congo. Uganda and Rwanda back rebels seeking to overthrow the Congolese government, while the government is backed by Zimbabwe and Angola.

Some information for this report provided by AP and AFP.