Rebels waging an offensive in the Central African Republic seized the major north-central town of Kaga-Bandoro on Tuesday, a military source said.
"The rebels came into town in vehicles and on motorcycles, and started using heavy weapons to fire at strategic points: a military base, police stations, the customs office. Members of the Central African armed forces resisted briefly then began to retreat towards Sibut," about 130 kilometers (80 miles) south, the source said.
Kago-Bandoro is the fourth regional capital to be attacked and occupied by rebels, who have been making their way steadily south from Ndele near the border with neighboring Chad.
"A large part of the population took cover in their homes when they heard the explosions, and many residents fled in the direction of neighboring villages," the source added.
The Seleka rebel group began its offensive on December 10, demanding that the government respects various peace accords signed between 2007 and 2011.
The most recent attack comes after the government on Monday said it was prepared for dialogue, but only when the rebels had withdrawn from occupied towns.
A military source in Bangui said Central Africa's President Francois Bozize had met with military officials to discuss the situation.
On Friday, central African heads including Bozize met in Chad capital N'Djamena and proposed immediate dialogue.
The Seleka rebels have said they are open to talks, but have refused to pull back from their positions.
Bozize seized power in a 2003 coup.
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