* Agreement sees creation of "neutral international force"
* It will target both Tutsi-led M23 rebels and Hutu FDLR
* Effort involves region in trying to pacify east Congo
* U.S. official sees "step in the right direction" (Adds comments from U.S. Special Adviser for Great Lakes)
By Aaron Maasho and Pascal Fletcher
ADDIS ABABA, July 12 (Reuters) - The Democratic Republic of Congo, Rwanda and neighbouring states called on Thursday for the creation of an international military force to eliminate armed rebels in the DRC's turbulent east.
Their agreement, signed on the sidelines of an African Union summit in Addis Ababa, proposes an internationally-backed military response to an offensive by rebels in the DRC's North Kivu province, a political and ethnic tinderbox.
The document was signed by the foreign ministers of nearly a dozen states of the Great Lakes region, including the DRC and Rwanda, and condemned recent advances by the Tutsi-led M23 rebel movement and a rebellion by predominantly Hutu fighters of the FDLR insurgent group in North and South Kivu.
It was not immediately clear in the text, to be presented to African heads of state at the Addis summit, where the troops would come from to establish the "neutral international force" that would take on the Congolese rebel groups.
The United Nations has a large peacekeeping mission in the Congo but has often been hard pressed to halt fighting. An Indian peacekeeper was killed last week during clashes.
On Thursday, U.N. and Congolese army helicopters used rockets and machinegun fire to pound rebel positions in the villages of Rumangabo and Bukima, U.N. officials and witnesses said.
Eastern Congo's enduring conflict, which has killed, maimed and displaced several million civilians over nearly two decades, has its roots in Tutsi-Hutu ethnic and political enmities dating back to the 1994 Rwandan genocide.
Later invasions of Congo by Rwandan forces and Kigali's backing of Congolese rebels fuelled two crippling wars.
The DRC's government, whose army has retreated in disarray before the advancing M23 rebels over the last week, had accused neighbour Rwanda of fomenting and supporting the rebellion, which began as a mutiny by former rebels in the government army.
Rwanda strenuously denies supporting the M23, though U.N. investigators have produced evidence to back the allegations that senior Rwandan military officials provided backing for the rebels.
In the document signed on Thursday, the states grouped in the International Conference of the Great Lakes Region proposed working with the AU and the United Nations to create "a neutral international force to eradicate M23, FDLR and all other negative forces in eastern Democratic Republic of Congo".
The document said "no support should be given to any negative forces".
Both the Congolese and Rwandan foreign ministers welcomed the agreement as a step towards ending the latest fighting in North Kivu, which since April has displaced more than 100,000 civilians, according to U.N. officials.
"I think it is positive. The most important thing is putting it into effect," Congolese Foreign Minister Raymond Tshibanda N'tungamulongo told Reuters.
Rwandan Foreign Minister Louise Mushikiwabo said it was positive to see the region getting involved to halt the eastern Congo conflict. "It is a good agreement, it is not a solution, it is part of a solution," the Rwandan minister told Reuters.
While Congo welcomed the agreement's explicit condemnation of the M23 group which Kinshasa says is backed by Kigali, Mushikiwabo maintained Rwanda's position that it was not involved at all in what she called "a mutiny by undisciplined soldiers of the Congolese army".
"The mistake is to try to associate them with Rwanda," she told Reuters. At the same time, she welcomed the prospect of what she called "swift, decisive military action" against the FDLR, which opposes Rwandan President Paul Kagame.
The U.S. Special Adviser for the Great Lakes and the DRC, Ambassador Barrie Walkley, welcomed the signing as "a step in the right direction".
He told Reuters efforts to end the fighting in North Kivu would be bolstered if, as expected, President Kagame and Congolese President Joseph Kabila both attended a mini-summit on eastern Congo at the weekend in Addis during the AU meeting.
But he added there was uncertainty about how the "neutral international force" proposed in the accord would be created.
"The intention is absolutely laudable, but what does it mean? Where would the troops come from," he asked.
U.N. Secretary-General Ban Ki-moon had told Rwandan President Kagame he was concerned about reports that dissident Congolese troops were receiving support from Kigali officials.
Western governments have also been pressing for the arrest of renegade Congolese Tutsi general Bosco Ntaganda, who is wanted by the International Criminal Court (ICC) for suspected war crimes.
The M23 rebellion, which takes its name from a 2009 peace accord the rebels say was violated by Kinshasa, has been swelled by hundreds of defectors from the Congolese army who walked out into the bush in support of Ntaganda.
Congolese officials said Ntaganda was in Rwanda.
Mushikiwabo denied this. "If the Congolese want to discipline their own officer, that's up to them to decide," she said, adding that Rwanda was not a signatory to the accord that established the ICC. (Additional reporting by Pete Jones in Goma; Editing by Andrew Osborn)