(Reuters) -Chaotic scenes unfolded in the eastern Congo city of Bukavu on Saturday after Rwanda-backed M23 rebels reached its outskirts, while a threat by Uganda's army chief to attack a Congolese town raised fears of the conflict flaring into a wider regional war.

Residents and business owners in eastern Congo’s second largest city are sitting in wait after a night of loud gunfire marking the ongoing advance of Rwanda-backed rebels.

Panic and looting are sweeping through eastern Congo’s second largest city as residents fled by the thousands to escape the looming advance of Rwanda-backed rebels. It came a day after M23 fighters entered the outskirts of Bukavu.