UPDATE 2-Congo says no talks with rebels unless they quit Goma

* Rebels given 48 hours to quit Goma

* M23 movement has not accepted, rejected proposals

* Government troops seen on the back foot

* African Leaders scrambling to prevent conflict spreading

GOMA, Democratic Republic of Congo, Nov 25 (Reuters) - Congo

said on Sunday it would not negotiate with M23 rebels in the

east until they pulled out of the city of Goma, but a rebel

spokesman said Kinshasa was in no position to set conditions on

peace talks.

Congolese President Joseph Kabila met with M23 for the first

time on Saturday after an urgent summit in Uganda where regional

leaders gave M23 two days to leave Goma, which the rebels seized

six days ago after U.N.-backed government troops melted away.

Eight months into a rebellion that U.N. experts say is

backed by neighbouring Rwanda, the rebels have so far shown no

sign of quitting the lakeside city of one million people.

The rebels say they plan to march on other cities in the

east, and then strike out across the country to the capital

Kinshasa, across 1,000 miles (1,600 km) of dense jungle with few

roads, a daunting feat achieved 15 years ago by Kabila's father.

Amani Kabasha, a spokesman for M23's political arm, welcomed

the meeting with Kabila but questioned the government's resolve

to end a crisis that risks engulfing the region.

"Why put conditions on talks? You pose conditions when you

are in a position of strength. Is the government really in such

a position?" Kabasha told Reuters in Goma, which sits on the

north shore of Lake Kivu at Congo's eastern border with Rwanda.

Vianney Kazarama, the rebels' military spokesman, said

government forces that had been reinforcing along the shores of

the lake were now deploying in hills around the rebel held town

of Sake and government-held Minova, both Goma's west.

A U.N. source in Minova said government soldiers had gone on

a looting spree for a second straight night there. The town was

calm on Sunday but gunshots rang out overnight, the source said.

"What is real is that the morale of the troops is very low.

They've lost hope in the commanders," the U.N. source said.

The Congolese army has vowed to launch counter-offensives

and win back lost territory. The rebels have warned the

government against embarking on a "new military adventure".

So far, the unruly and poorly-led army has been little match

for the rebels, despite assistance from a U.N. peacekeeping

mission that deployed attack helicopters to support the

government before Goma fell.

Rebel leaders share ethnic ties with the Tutsi leadership of

Rwanda, a small but militarily capable neighbour that intervened

often in eastern Congo in the 18 years since Hutu perpetrators

of Rwanda's genocide took shelter there. Rwanda has repeatedly

denied Congolese and U.N. accusations it is behind M23.

Saturday's Kampala summit called on the rebels to abandon

their aim of toppling the government and proposed that

government troops be redeployed inside Goma.

The rebels have not explicitly rejected or accepted the

proposals. They are, however, unlikely to cede control of the

city or accept government soldiers inside it.

WITHDRAW

Regional and international leaders are trying to halt the

latest bout of violence in eastern Congo, where millions have

died of hunger and disease in nearly two decades of fighting

fuelled by local and regional politics, ethnic rifts and

competition for reserves of gold, tin and coltan.

"Negotiations will start after the (M23) withdrawal from

Goma," Congolese government spokesman Lambert Mende said.

Kabila was still in the Ugandan capital on Sunday morning

but was expected to return to Kinshasa later in the day or on

Monday, two Congo government sources said. Kabila's

communications chief Andre Ngwej said he did not believe

official talks would start in the next few days.

While Kabila's army is on the back foot, analysts are

sceptical the rebels can make good on their threat to march on

Kinshasa without major support from foreign backers.

The regional leaders' plan proposed deploying a joint force

at Goma airport comprising of a company of neutral African

troops, a company of the Congolese army (FARDC) and a company of

the M23.

In a statement, the Kinshasa government said Tanzania would

take command of the neutral force and that South Africa had

offered "substantial" logistical and financial contributions

towards it. The Kampala plan did not say what the consequences

would be if the rebels did not comply.

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