Residents and business owners in eastern Congo’s second largest city are sitting in wait after a night of loud gunfire marking the ongoing advance of Rwanda-backed rebels.

(Reuters) -Chaotic scenes unfolded in the eastern Congo city of Bukavu on Saturday after Rwanda-backed M23 rebels reached its outskirts, while a threat by Uganda's army chief to attack a Congolese town raised fears of the conflict flaring into a wider regional war.

The Rwandan-backed rebels' entry into Bukavu follows their capture of Goma, defying international calls for a ceasefire.