By Joe Bavier

ABIDJAN (Reuters) – The U.S. government said Saturday it will cut military aid to Rwanda for this year, citing evidence Kigali is supporting rebels in the Democratic Republic of Congo, in a significant step by one of Rwanda’s staunchest allies.

Rwanda has denied reports by United Nations experts and rights groups that it is backing eastern Congolese rebels, including the M23 group, which has seized parts of North Kivu province in fighting that has displaced over 260,000 people since April.

The U.S. State Department cited evidence of Rwandan support for the rebels in announcing the military aid suspension.

“The United States government is deeply concerned about the evidence that Rwanda is implicated in the provision of support to Congolese rebel groups, including M23,” said Hilary Fuller Renner, a State Department spokeswoman, in an emailed statement.

“We will not obligate $200,000 in Fiscal Year 2012 Foreign Military Financing funds that were intended to support a Rwandan academy for non-commissioned officers. These funds will be reallocated for programming in another country,” she said.

Washington has stood by Rwanda in the past despite the tiny nation’s long history of involvement in wars in vast neighboring Congo.

Rwanda’s foreign minister has previously said reports of its involvement in Congo fighting were “disingenuous” and a bid to make Rwanda a scapegoat for its neighbor’s problems. Officials in Kigali were not immediately available for comment on the U.S. aid cut.

Renner said Washington was in the process of assessing whether further steps should be taken in response to Rwanda’s actions in Congo.

She said the United States would continue to help Rwanda support peacekeeping missions. Rwanda has a major peacekeeping presence in Sudan’s Darfur region.

Although the amount of cash being withheld is small, analysts said the move clearly signaled Washington’s displeasure.

“The U.S. government has been a longstanding ally of the Rwandan government. This step, even if symbolic, is emblematic of a shift in perception – if not necessarily in aid – in Washington,” said independent Congo expert Jason Stearns.

Rwanda sent its army into Congo, then called Zaire, in the mid 1990s, ostensibly to hunt down Rwandan Hutu rebels who fled there after the 1994 genocide.

A decade of conflict followed, in which Rwandan forces helped Congolese rebels topple the dictator Mobutu Sese Seko. They then fell out with the rebels they initially backed, sparking a war that sucked in other neighboring armies and officially ended in 2003.

The current rebellion comes after three years of generally improved relations between Kinshasa and Kigali since the latter helped end a 2004-9 eastern Congolese uprising, which Rwanda was also accused of backing.

The leaders of Congo and Rwanda agreed at a meeting this month to allow a neutral force to be deployed in Congo to defeat each others’ rebels, but the plan’s details have not been announced yet.

(Writing by David Lewis; Editing by Roger Atwood).