New Congo fighting flares, summit urges ceasefire

* Fresh fighting erupts in east Congo's North Kivu province

* African leaders call for ceasefire at Great Lakes summit

* U.N. official rejects reports of Angolan troops present

By Emmanuel Braun

KIBATI, Congo (Reuters) - Fighting between rebels and the army caused a fresh refugee exodus in east Congo on Friday, and African leaders called for an immediate ceasefire to end a conflict the U.N. said could engulf the Great Lakes region.

The renewed combat near Kibati in Democratic Republic of Congo's North Kivu province sent thousands of civilians fleeing in panic from a nearby refugee camp, adding urgency to a regional peace summit in the Kenyan capital Nairobi.

"There should be an immediate ceasefire by all the armed men and militia in North Kivu," said Kenyan Foreign Minister Moses Wetangula, reading a communique agreed by seven African leaders who met U.N. Secretary-General Ban Ki-moon in Nairobi.

The leaders from the Great Lakes region, including the presidents of Congo and Rwanda, said they would be willing to send peacekeeping troops to east Congo if required.

Congolese President Joseph Kabila and Rwandan President Paul Kagame, who have accused each other of supporting rival rebel groups, held a brief one-on-one meeting during the summit.

Ban, who said he had come to the region with a heavy heart but was encouraged by the summit, urged Kabila and Kagame to continue their dialogue.

African Union Chairman and Tanzanian President Jakaya Kikwete said former Nigerian President Olusegun Obasanjo, the newly nominated U.N. special envoy for east Congo, would try to talk to the warring parties on the ground, including the Congolese rebel leader Laurent Nkunda.

Fighting between Nkunda's Tutsi rebels and Congo's army has spread along the hilly border with Rwanda, uprooting hundreds of thousands of people and creating a humanitarian crisis.

The African leaders called for a humanitarian corridor to be set up to channel aid to help refugees.

"This crisis could engulf the broader sub-region," Ban told the Nairobi summit, adding that only a lasting political settlement, rather than military moves alone, could solve it.

CIVILIANS STREAM SOUTH

As the United Nations and African leaders were meeting, Nkunda's battle-hardened fighters and government troops exchanged machinegun, mortar and rocket-propelled grenade fire from green hills in sight of North Kivu's Nyiragongo volcano.