Loud blasts rang out north of the flashpoint city of Goma, Democratic Republic of Congo, on Monday afternoon, and up to 1 000 people fled towards the city in a cloud of dust.
"Our forces have inflicted very heavy losses on the M23 fighters, 120 have been killed and 12 captured," government spokesperson Lambert Mende said on Monday.
Mende said 10 soldiers had also died in the ongoing clashes between the army and rebels of the M23 group.
The fighting broke out on Sunday outside Goma, the capital of North Kivu province in the volatile east – an area rich in minerals including gold and coltan, a key component in cell phones and other electronic equipment.
Several Congolese army tanks fired at M23 positions on Monday. Mortar fire could also be heard.
The M23 briefly seized Goma late last year before withdrawing under international pressure.
Mende said that this time they had attacked army positions supported by Rwandan troops.
"For several weeks the M23 rebels and their Rwandan allies have been reinforcing their positions," he said.
The M23, an armed group launched by Tutsi former soldiers who mutinied from the Congolese army in April 2012, blamed the government for the fighting.
In a statement, it condemned "in the strongest terms the resumption of war initiated by the Congolese government".
The group, which says it is fighting for the full implementation of a peace deal that incorporated an earlier rebel group into the Congolese army, said it was committed to peace talks.
United Nations experts have accused both Rwanda and Uganda of supporting the M23, and US President Barack Obama earlier this month urged the DRC's neighbours "to stop supporting armed groups".
Both countries have denied the charges.
The UN has its largest peacekeeping mission in the world in DRC, including a new "intervention brigade" created by the Security Council in March to fight armed groups – the first offensive unit ever authorised by the UN.
UN soldiers did not intervene in the recent clashes, Mende said.
In a statement, the UN force in the region Monusco confirmed the use of tanks and heavy artillery.
"Any attempt by the M23 to advance toward Goma will be considered a direct threat to civilians," it warned.
UN peacekeepers were prepared for "any necessary measures, including the use of lethal force", to protect civilians, it added.
Mende said government forces had managed to recapture previously rebel-held positions as the M23 fled. But he declined to confirm reports that some 2 000 soldiers had been deployed in the fighting.
In Rwanda meanwhile, a military spokesperson said two mortar bombs had been "deliberately" fired into the country from DRC on Monday.
The spokesperson blamed the Congolese army and the UN peacekeeping force on the grounds that the bombs were fired from territory they control. The mortars caused no casualties.
The UN's new intervention brigade of about 3 000 soldiers began arriving in the region in May, heavily armed and with more power to fight renegade forces than ever before.
The troops, drawn in equal numbers from Malawi, South Africa and Tanzania, are joining about 17 000 UN soldiers already deployed in the area with a limited mandate to protect civilians and themselves.
In all, about 30 armed groups are active in the region, where they have lucrative stakes in the illegal mining of diamonds, gold and coltan. These minerals are then exported around the world via neighbouring Burundi, Rwanda and Uganda.
The fighting outside Goma comes after a separate rebel attack in the town of Kamango in the northernmost part of the province sent 55 000 people fleeing to neighbouring Uganda, according to the Red Cross.
Kamango was attacked and briefly occupied Thursday by a Ugandan-led rebel group, the Allied Democratic Forces (ADF).
The ADF has been relatively quiet in recent years, but one Western military source said attacks had increased in recent weeks. – AFP