* M23 rebels says withdrawing to allow investigation
* Rebels want probe into Rwanda shelling
* U.N. says no fighting at the front on Friday (Adds Congo, Rwanda, U.N. comments)
By Pete Jones
GOMA, Democratic Republic of Congo, Aug 30 (Reuters) - D emocratic Republic of Congo's M23 rebels suspended fighting and withdrew from the frontline on Friday to allow an independent investigation into shelling that hit neighbouring Rwanda, its leader said.
Rwanda accused Congo on Thursday of shelling its territory and said such "provocation" would not be tolerated, raising fears of an escalation in the conflict in eastern Congo where army troops and U.N. peacekeepers have been battling the rebels.
The United Nations has thrown its weight behind Congo's government, saying its peacekeepers witnessed the M23 rebels firing shells into Rwanda.
"We have just asked our forces to withdraw from the Kanyaruchinya front line and cease combat so as to allow for an investigation into who was shelling Rwanda," M23 leader Bertrand Bisimwa told France's RFI radio.
Bisimwa said the decision would have immediate effect but the M23 would hold onto other positions. He asked Congo's government to resume negotiations to end the conflict in the mineral-rich east of the vast central African state.
The M23 rebels, named after a March 23, 2009, peace deal that ended four years of rebellion in eastern Congo, took up arms last year saying the government had failed to honour the agreement, which included integrating them into the army.
After seizing Goma in November, the rebels further demanded Congo's President Joseph Kabila hold national talks, release political prisoners and disband the electoral commission.
A military spokesman for the U.N. mission in Congo (MONUSCO) said there was no fighting along the front on Friday and the rebels seemed to have pulled back.
Congo's government spokesman, Lambert Mende, confirmed that the rebels were withdrawing from the frontline but rejected any resumption of peace talks, saying the M23 must first disarm, demobilise and become a political party.
"They are withdrawing but just to displace the problems they cause deeper into the country," Mende said.
U.N. Secretary General Ban Ki-moon condemned the violence in Congo and urged parties on Friday to pursue a political process to tackle the causes of the conflict, a spokesman said.
Ban, who spoke to Rwandan President Paul Kagame on Thursday, also condemned the indiscriminate shelling by the M23 that caused deaths, injuries and damage among the civilian population in Congo and Rwanda, as well as among U.N. peacekeepers.
A Tanzanian peacekeeper was killed in Wednesday's fighting, the first death since a new U.N. Intervention Brigade engaged rebels last week, with an unprecedented mandate to stamp out armed groups and enforce peace in eastern Congo.
Regional diplomats said Rwandan troops were seen moving north from the capital and local media published photos of troops including armoured personnel carriers and trucks moving north towards its border with Congo.
Asked if a diplomatic solution was possible, Rwandan Foreign Minister Louise Mushikiwabo told Reuters: "If diplomatic resolution means Rwanda standing by, arms crossed, waiting for its territory to be bombed and its people killed, then diplomacy is definitely off the table." (Reporting by Pete Jones; Writing by Bate Felix; Editing by Daniel Flynn and Elizabeth Piper)