Rebels offered to talk peace with President Laurent Kabila after taking control of a key western town that is the last major obstacle before the capital, foreign diplomats said Thursday.

Political leaders in the rebel movement made the surprise cease-fire offer Wednesday as fighting continued around Mbanza-Ngungu, 100 miles south of the capital of Kinshasa, a western diplomat said on condition of anonymity."The negotiation offer has not stopped the fighting," the diplomat said.

Two other government officials confirmed Thursday that the rebels were in Mbanza-Ngungu and that fighting near that city continued.

In a sudden shift Wednesday, the political wing of the rebel movement - a coalition of ethnic Tutsi fighters, Rwandan soldiers and disaffected members of the Kabila's army - said peace talks were possible if the government acknowledged this conflict was a domestic problem.

The government, however, says the rebels are simply pawns in a Rwandan military move to dominate the region. Kabila, who remains in his southern stronghold of Lubumbashi, has insisted that neighboring Rwanda orchestrated the revolt with the support of Uganda - a charge both countries deny.

"We will not negotiate with the instruments of Rwanda and Uganda," Information Minister Didier Mumengi said in Kinshasa.

The two countries helped Kabila oust former dictator Mobutu Sese Seko 15 months ago.

The government in recent days has been emboldened by a pledge from several of its southern neighbors to back Kabila.

In Ethiopia, the Organization of African Unity also said it backed Kabila and urged the rebels to disarm.

In Kinshasa, state-controlled Voice of the People radio made no mention of the rebel offer.