Almost all the residents of the north-eastern Central African Republic town of Birao have fled following clashes three weeks ago, the UN says.
UN Humanitarian Co-ordinator to the CAR, Toby Lanzer, said he was shocked at the scale of the destruction.
"Never before has the UN seen a town where 70% of houses have been torched," he said following a visit.
CAR has accused neighbouring Sudan of backing the rebels and says attacks have been launched from Darfur.
The UN says that some 14,000 people have fled the town to live in the bush, while just 600 remain in their homes.
There are now some 250,000 displaced people in CAR - three times more than a year ago, the UN says.
Rebel denial
"All these houses were burned down by rebels when they were pulling out of the town," Birai prefect Colonel Mathieu Mobiliawa told the BBC.
This declaration was rejected by the rebels whose leader Damane Zakaria said:
Some 250,000 have fled their homes in CAR
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"We have no reason to burn down houses in our own town; the regular troops and the French army are responsible for the destruction of Birao."
Mr Damane, who was speaking on a telephone from his stronghold of Tiringulu, appealed to the international community to send a team to investigate the consequences of the attacks.
The BBC's Joseph Benamsse in the capital, Bangui, says it is clear that both regular troops and rebels are responsible for the destruction of Birao.
A female medical worker still living in the devastated town accused all the forces on the ground for what happened there.
"Both rebels and the national army were firing rockets in all directions and most of these rockets set houses on fire," she said.
"French jet fighters also contributed to the destruction as they hit some houses."
She estimated the number of civilians who died during the attack at three. Our reporter says the humanitarian situation in the region is deplorable.
The town's main hospital is closed, as medical workers have fled and medicines were looted by the rebels.
The last census in 2004 registered about 22,000 people in Birao.
Most of the people have fled to the town of Am-Dafock, located on the CAR/Sudan border.
Ms Zanaba also claimed that some people are living in the bush without shelter, proper food, drinking water and medical care.
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1. Chad says Sudan government-backed militias are attacking villagers in Chad. Some 200,000 Darfur refugees are also in Chad 2. Sudan accuses Chad of backing the Darfur rebels 3. Chad says it will send troops to help CAR fight the rebels 4. CAR says Sudan backs rebels who have seized towns in CAR
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