A Tutsi-led group, the M23 has conquered swathes of territory in the country's North Kivu province in recent months and advanced towards its capital Goma.
Under heavy international pressure to cease fighting, the rebels delivered the strategic town of Kibumba to a regional military force on Dec. 23, calling the move a "goodwill gesture done in the name of peace."
The Congolese army however promptly dubbed the Kibumba handover a "sham."
One resident, speaking on condition of anonymity for security reasons, told AFP that in all the villages around Kibumba and Buhumba "the M23 are still with us," as are soldiers of the East African regional force.
The rebels had withdrawn from a couple of positions about three kilometers (two miles) from the center of Kibumba, the resident said.
On their return to Goma late Monday, two farmers who had stayed in central Kibumba since Saturday also said that the M23 "are still there."
The rebels have even built a medical center for themselves, they said.
Boniface Kagumyo, mayor of Kibumba but currently living in a displacement camp near Goma, said he left after an exchange with regional force commanders.
"The EAC (East African Community) said to us to wait and that perhaps they (the M23) are going to withdraw" but until now "the M23 are still in the area, their withdrawal has not been effective," he said.
The DRC — along with the United States and several European countries — has repeatedly accused neighboring Rwanda of backing the M23, although Kigali denies the charge.