Nairobi/Goma - Diplomatic efforts to resolve the crisis in the Democratic Republic of Congo, where a rebel offensive has forced tens of thousands to flee, were under way Friday as aid agencies warned of a looming humanitarian crisis.

A fragile peace is holding in the east of the country after rebel Tutsi General Laurent Nkunda on Wednesday evening called a ceasefire as his troops were on the verge of taking the major city of Goma.

Fighting had raged for four days, with the Congolese army being driven into full retreat.

UN peacekeepers also joined the battle, pounding Nkunda's National Congress for the Defence of the People (CNDP) with helicopter gunships.

Congolese government troops who retreated to Goma, the capital of North Kivu province, have reportedly been looting and killing civilians.

Many of those who fled are based in and around Goma, and aid agencies such as the Red Cross are warning that a humanitarian catastrophe is in the making unless urgent action is taken.

The European Union on Thursday pledged 4 million euros in emergency aid for the displaced in the region.

Diplomatic efforts to resolve the crisis are in full swing.

The top US envoy for Africa, Jendayi Frazer, arrived in the DR Congo on Thursday for talks with President Joseph Kabila aimed at ending the violence.

Frazer has tentative plans to visit neighbouring Rwanda for talks with President Paul Kagame Friday.

The EU's aid commissioner, Louis Michel, is also meeting with Kabila and Kagame in an attempt to get them to talk, something many believe is key to defusing tensions in the east of the DR Congo.

The African Union Security Council was also set to meet Friday to discuss the crisis.

DR Congo has accused Rwanda of backing Nkunda and there were some reports of cross-border firing during the fighting.

Nkunda says he is fighting to protect Tutsis from armed Hutu groups.

Many Hutus fled to Congo after the 1994 massacres in Rwanda when Hutu militants killed an estimated 800,000 Tutsis and moderate Hutus in the space of a few months.

The CNDP and other groups in January signed peace accords designed to end sporadic clashes that occurred during 2007, four years after a war that began in 1998 officially ended.

But the CNDP and government soldiers have been involved in repeated clashes in the eastern provinces of North and South Kivu since late August.

The UN said about 250,000 civilians have fled the fighting since August, bringing the number of refugees in North Kivu to almost 1 million.

More than 5 million people are estimated to have died as a result of the 1998-2003 war in the resource-rich nation, most of them from hunger and disease.

The conflict is often referred to as the African World War, owing to the large number of different armed forces involved.