The BBC's Bill Hayton: "The situation is getting very serious"

On Wednesday, the West African intervention force, Ecomog re-established its positions in the village of Waterloo, 30km outside Freetown.

It followed Tuesday's rebel attack on the strategically important area which dominates access to the capital.

The BBC's Mark Doyle: Rebels have executed several thousand people in recent months

The extent of casualties from the fighting is not known, but the attack was the closest that the rebels had got to the capital since being ousted from power by the Nigerian-led Ecomog in February this year.

A number of young people were kidnapped by the rebels and several houses in Waterloo burned down in the fighting, before Ecomog soldiers regained control.

An eyewitness said some people, who had fled Waterloo, had returned home.

Residents in Freetown say the situation there remains very tense.

More than 1,000 Nigerian troops have arrived in Freetown, the capital of Sierra Leone, to reinforce the Ecomog peacekeeping force.

Fighting escalates

The fighting around Waterloo comes after several days of intense conflict, which saw the rebels gain ground. They first took the key diamond-mining town of Koidu in the east of the country, before then pressing towards the northern town of Makeni, and Freetown.

President Kabbah: Will not talk to the rebels until they lay down their arms

Church sources say that thousands of people have fled Makeni for fear of being caught up in fighting between rebels and forces loyal to the government.

On Tuesday, rebels loyal to the ousted military government attacked the village of Binkolo, a few kilometres north of Makeni.

The rebels say their latest offensive is aimed at forcing the government to the negotiating table.

The government says it will only talk to the rebels if they lay down their arms.

The government has issued appeals for calm, saying Ecomog is in control.

Well-trained force

The Nigerians are believed to have about 5,000 troops in Sierra Leone and they form the backbone of forces loyal to the government. They have a relatively well-trained military force and sophisticated weapons, including fighter jets.

BBC West Africa Correspondent Mark Doyle says the Nigerians are defending an elected government facing a rebel force that is unpopular among Sierra Leonians because of atrocities it has committed against civilians.

President Kabbah's government was overthrown in a military coup in May 1997, when rebel soldiers joined forces with the Revolutionary United Front (RUF), which took up arms in 1992.

It was only after Ecomog intervened that President Kabbah was restored to power in February this year.

The United Nations Security Council has expressed concern over the rebel attacks and reported atrocities against civilians.