* Talks since December have made minimal progress
* Resumption of hostilities risks regional war
* Rebel movement blacklisted by U.N. this week
By Elias Biryabarema
BUNAGANA, Democratic Republic of Congo, Jan 3 (Reuters) - Congolese rebels will attend peace talks with the government this week but will walk away if Kinshasa does not sign a ceasefire, the rebel political chief said on Thursday.
Efforts last month to end the nine-month rebellion in Democratic Republic of Congo's (DRC) volatile east failed when both sides talked war instead of an end to the crisis.
Foreign powers believe the rebels are backed by neighbouring Rwanda and fear the conflict could spread and spark another regional war.
The rebel March 23 Movement (M23), named after a 2009 peace deal for eastern Congo that fell apart, questions the commitment of President Joseph Kabila's government to the peace process.
Jean-Marie Runiga, head of the rebel political wing, said government troops were reinforcing positions in the east and warned that M23 would defend itself against any offensive.
The talks are due to take place on Friday in Kampala, the capital of regional mediator Uganda.
"If Kinshasa continues to refuse to sign a ceasefire, M23 is going to ask its delegation to return to DRC. We will wait and when they say 'we're ready to sign (a ceasefire) we'll go back'," Runiga told reporters in Bunagana, a border town under rebel control.
Nestled in lush green hills less than a kilometre from the Ugandan frontier, Bunagana fell into rebel hands last July after government soldiers fled.
Negotiations began last month after regional leaders secured a rebel pull-out from the city of Goma in Congo's eastern North Kivu province.
The talks quickly stalled in a climate of deep mistrust. Uganda, alongside Rwanda, is accused by a group of U.N. experts of supporting the rebel campaign.
But the frontlines have been quiet since the rebels left Goma.
"WE NEED ENCOURAGEMENT"
Successive cross-border conflicts have killed and uprooted millions in the Congo basin since the colonial era, driven by political and ethnic divisions and competition for vast mineral resources.
At first, M23 said it had taken up arms because the Kinshasa government had failed to keep the 2009 peace deal, under which the rebel fighters were integrated into the national army. It later broadened its goals to include the "liberation" of all of Congo and the ousting of President Kabila.
M23 is led by Bosco Ntaganda, a Tutsi warlord indicted by the International Criminal Court. This week the United Nations blacklisted M23 along with another Congolese rebel group.
"We need encouragement from the U.N., not sanctions," said Runiga, dressed in a sharp suit and flanked by fighters clad in crisp fatigues and brandishing automatic rifles.
The other group hit with U.N. sanctions was the FDLR, or Democratic Forces for the Liberation of Rwanda. The FDLR is a Rwandan Hutu group that opposes Rwandan President Paul Kagame's Tutsi-led government and includes militiamen suspected of participating in Rwanda's 1994 genocide.
One M23 commander, Bertrand Bisimwa, said Congo's government had air-dropped FDLR fighters to reinforce army positions near Goma last month.
Officials from the government in Kinshasa were not immediately available for comment.
The United Nations peacekeeping force in Congo, MONUSCO, rejected talk that the number of FDLR fighters had swollen to several thousand.
MONUSCO said on Wednesday that the group had "no more than a few hundred" fighters in the region and dismissed claims that weapons and munitions were being supplied to the FDLR. (Additional reporting and writing by Richard Lough in Nairobi; Editing by Tom Pfeiffer)