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Rwanda accused Washington's move as “one sided” and politically motivated.
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Fighting has persisted despite a US-brokered peace deal in December between the Congolese and Rwandan governments aimed at ending the long-running conflict in eastern DR Congo.
The US treasury department accused the Rwandan army of undermining the peace deal by training, equipping and fighting alongside the M23 rebel group.
Rwanda swiftly rejected the accusations, saying the sanctions had unfairly targeted one side and "misrepresent the reality and distort the facts of the conflict".
Kigali denies supporting the M23, despite overwhelming evidence, and says its military presence in the region is a defensive measure against threats posed by armed groups in DR Congo to Rwanda's security.
The sanctions come three months after Congolese President Félix Tshisekedi and his Rwandan counterpart Paul Kagame signed the Washington Accords, aimed at ending hostilities.
The ceremony was hosted by US President Donald Trump, who expressed optimism that it would bring lasting peace and described the signing as "historic".
The M23 rebels were not signatories but have been part of a parallel peace process led by Qatar, a US ally that has strong ties with Rwanda.
Days after the Washington deal, the M23 captured the strategic Congolese city of Uvira, near the border with Burundi, forcing thousands to flee.
The group later withdrew under pressure from the US government.
However, the treasury department said on Monday that the M23's continued presence near Burundi's border "carries the risk of escalating the conflict into a broader regional war".
It said that the rebels' offensives would have been impossible without the "the active support and complicity" of the Rwanda Defence Force (RDF) and key senior officials.
"The RDF has introduced advanced military equipment to
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