John Banyene, president of local civil society, told The Associated Press that the rebels now controlled the center of Rutshuru and Kiwanja, 70 kilometers (43 miles) from the regional capital, Goma.
“As we speak, we confirm that the M23 rebels and their allies control the town of Kiwanja, but the armed forces of the Democratic Republic of the Congo are not giving up,” Banyene told reporters in Goma.
There was no immediate confirmation from Congolese authorities or the military on the reported seizure of the two towns.
Daniel Subuka, a Kiwanja resident contacted by phone by AP, said he saw well-armed M23 rebels entering Kiwanja and others moving towards central Rutshuru.
The M23 rebels had been largely inactive for nearly a decade before reemerging last November in eastern Congo. Authorities say nearly 200,000 people have been displaced even before the latest outbreak of violence last week.
The Congolese government has accused neighboring Rwanda of supporting the M23, an allegation the Rwandan government has repeatedly denied.
The UN peacekeeping mission in Congo known as MONUSCO tweeted on Saturday that it “strongly condemns the hostile actions of the M23 and their serious repercussions on the civilian population”.
MONUSCO said it has raised the alert level of its troops, which are deployed to support the Congolese army in its operation against the M23, and said it is providing air support, intelligence and equipment.