"The M23 must cease all hostility and withdraw from occupied areas, in accordance with the roadmap set out in the Luanda mini-summit," the mission known by its acronym MONUSCO, said on Twitter.
The attack on Kitshanga is a new offensive by rebels who have seized large areas of eastern Congo's North Kivu province in a rapid onslaught since May that threatened the provincial capital, Goma.
The insurgency has inflamed regional tensions with Congo accusing neighbour Rwanda of backing and sponsoring the Tutsi-led rebellion. United Nations experts and Western powers have accused Rwanda of backing the M23.
The government of Rwanda has denied any involvement.
Regional leaders brokered an agreement in November under which the rebels were meant to withdraw from recently seized positions by Jan. 15 as part of attempts to end the fighting that has displaced at least 450,000 people.
But a U.N. internal report said the rebels were flouting the ceasefire and withdrawal.
Two witnesses who fled Kitshanga and joined the throng of refugees at the MONUSCO base, said the rebels had taken control of the town.
"The army withdrew. I'm at the MONUSCO base," said a Kitshanga-based journalist, requesting anonymity for security reasons.
A spokesman for Congo's government, and army did not immediately respond to a request for comment.
The M23 said in a statement that it was obliged to intervene to protect Tutsis in Kitshanga and other areas.
(Additional reporting by Sonia Rolley; Writing by Bate Felix; editing by Grant McCool)
By Djaffar Al Katanty
