Rogue General Laurent Nkunda's fighters have withdrawn from the key town of Karuba in the east of the Democratic Republic of Congo, the UN says.
Hundreds of thousands of people have been fleeing their homes
Following the withdrawal, Gen Nkunda called for a new ceasefire agreement and said he was ready to integrate his fighters back into the national army.
An army spokesman told the BBC about 85 rebels and 16 soldiers had been killed in battles over the last three days.
Both the army and Gen Nkunda accuse the other of breaking a recent ceasefire.
The UN says the renewed fighting has made it hard to reach more than 300,000 people who rely on food aid, while 150,000 remain out of reach.
Gen Nkunda says he is fighting to protect the Tutsis minority and accuses the government of supporting Rwandan Hutu rebels who fled to DR Congo after the genocide in Rwanda in 1994.
The government had given the rebel general an ultimatum of 15 October to cease hostilities and integrate his forces into the army or face tough action.
The BBC's Arnaud Zajtman in Goma says the army claimed to have recaptured Karuba on Wednesday morning but the battle continued into the afternoon.
The UN then confirmed that Gen Nkunda's men had withdrawn 10km north of the town.
Our correspondent says the town is a key position as it is in an area where ethnic Tutsis live and it opens the way south to neighbouring South Kivu province.
Other clashes have been reported further west around the town of Masisi.
In the centre of Masisi itself, government troops stand guard outside the main hospital where casualties caught up in the fighting are being brought.
Our reporter says women have been arriving at a hospital with severely malnourished children in their arms.
Medical staff have had to open feeding centres in Masisi, but an aid worker with French aid group Medecins Sans Frontieres said bringing medical supplies to the hospital was a nightmare because the different armed groups have established roadblocks.
The road stretches through villages that have become ghost towns.
KEY FORCES IN THE KIVUS
FLNK - new group made up mainly of Congolese Mai Mai with some Rwandan Hutus formerly in the FDLR
FDLR - Hutu militia made up of former Rwandan soldiers and others who fled into Congo after the 1994 genocide
Gen Laurent Nkunda, with an estimated 5,000 soldiers
Monuc - UN Mission in the DR Congo
Families walk on the side of the road, their few belongings on their head, our reporter says.
More than 300,000 civilians have already fled to displaced camps where they rely on humanitarian assistance.
But our correspondent says in Masisi there is a camp of another sort. About 400 young men and 70 children have gathered together in an open field.
They say they have escaped from forced recruitment operated by the rebels of Gen Nkunda in the schools of the region.
They refuse to join any of the many armed groups in the area, our reporter says.
Our correspondent says they want peace to return so they can go back to school. But in the present climate for many children it is impossible to go to school.