M23 rebels in the Democratic Republic of Congo have seized the eastern town of Bunagana on the border with Uganda, local activists said on Monday, in a setback for Congolese forces who had said a day earlier they had the insurgents on the run.

Bunagana was an M23 stronghold during a 2012 insurrection that briefly overran the major city of Goma before Congolese and U.N. forces chased the rebels into neighbouring Rwanda and Uganda the following year.

The office of North Kivu's military governor said on Sunday that Congolese forces had "routed" the M23 following early-morning attacks near Bunagana, which is one of the main crossings into Uganda.

But Jean-Baptise Twizere, the president of a local civil society group, said the town fell to the rebels on Sunday night.

"Congolese soldiers who found themselves encircled by enemies in Bunagana could not do anything and since 11 p.m. they have left the city," he told Reuters on Monday from Bunagana.

Edgard Mateso, the vice president of an advocacy group in North Kivu province, confirmed the M23 takeover.

General Sylvain Ekenge, the spokesman for North Kivu's military government, said he did not yet have any information.

The violence in Bunagana has pushed over 25,000 people to flee the area, including thousands to Uganda, the United Nations said on Sunday.

When it formed in 2012, the M23 was the latest in a series of ethnic Tutsi-led insurgencies to rise up against Congolese authorities. The group's name refers to the March 23 date of a 2009 accord that ended a previous Tutsi-led revolt but that the M23 said Congo's government had not respected.

Congo and U.N. investigators accused Rwanda and Uganda of supporting the rebels during the 2012-2013 conflict. Both denied doing so.

Congolese authorities on Sunday renewed accusations that Rwanda has been backing the latest offensive by the rebels, who agreed in 2013 to demobilise but have continued to stage periodic attacks. Rwanda has denied providing any support.

On Monday, two senior Congolese security sources, who asked not to be named, also accused the Ugandan military of supporting the M23's offensive.

Twizere said he had seen Ugandan troops cross the border to block the Congolese army's access to Bunagana.

Uganda's army spokesman Brigadier Felix Kulayigye denied any involvement.

"We are only closely watching what's going on from across the border and we have been in that position for months," he said.