UNITED NATIONS (Reuters) - Rwanda appears likely to win one of five U.N. Security Council seats up for election on Thursday, despite accusations by a U.N. expert panel that the country's defence minister is commanding a rebellion in neighbouring Democratic Republic of Congo.

Rwanda is unopposed in its bid for the African seat on the Security Council, which is currently held by South Africa, but it still needs to be approved by two-thirds of the U.N. General Assembly members present to secure a two-year term.

U.N. diplomats said it was theoretically possible that Rwanda would fail to secure the necessary votes for election, although they said that was highly unlikely.

The confidential U.N. report, seen by Reuters on Tuesday, has cast a shadow over the East African country's plan to join the 15-member U.N. powerhouse - which has the ability to impose sanctions and authorize military interventions.

There are five veto-holding permanent members of the council - the United States, Britain, France, Russia and China - and 10 temporary members without vetoes. Thursday's election is for the term from January 1, 2013, to December 31, 2014.

The Security Council's "Group of Experts" said that Rwanda and Uganda - despite their strong denials - continued to support M23 rebels in their six-month fight against Congolese government troops in the east of the country.

Rwandan U.N. diplomat Olivier Nduhungirehe said Rwanda was not worried about the report harming its Security Council bid.

"The members of the General Assembly know exactly what our record is and they cannot be deterred or swayed by a baseless report, which has no credibility," said Nduhungirehe.

"We are the sixth (biggest) troop-contributing country for peacekeeping, we are a leading country in achieving the Millennium Development Goals, we have a record in post-conflict reconstruction and peace building," he said.

Argentina is running unopposed for the Latin American and Caribbean states' seat, but there is a three-way competition in both the Asia-Pacific group and the "Western European and Others" group.

Finland and Australia are expected by some diplomats to edge out Luxembourg for the two seats available in their group, but they said it could take several rounds of voting for those countries to reach the two-thirds' majority needed.

They said Luxembourg might still surprise people and win a seat in the secret-ballot vote in the 193-member assembly.

South Korea, Bhutan and Cambodia are all competing for one Asia-Pacific seat. Envoys said that race was too close to call.

'POSITIVE EFFECT'

The countries leaving the council in December are Colombia, Germany, India, South Africa and Portugal. The five current council members remaining until the end of 2013 are Azerbaijan, Guatemala, Pakistan, Togo and Morocco.

The last time Rwanda was on the council was in 1994-95. That coincided with the 1994 genocide in which 800,000 people were killed when the Hutu-led government and ethnic militias went on a 100-day killing spree, killing Tutsis and moderate Hutus.

A senior Western diplomat said on condition of anonymity that he hoped Rwanda's presence on the council would have a "positive effect" on the body's handling of Congo, although he acknowledged it was possible the opposite would be the case.

He said getting unanimity among the 15 council members on Congo's rebellion might be difficult with Rwanda in the room.

The Congolese government on Wednesday demanded targeted sanctions against Rwandan and Ugandan officials named in the U.N. experts report.

According to the U.N. experts, who monitor compliance with sanctions and an arms embargo on the Congo, Rwandan Defense Minister General James Kabarebe was ultimately commanding the rebellion and both Rwanda and Uganda were providing weapons, troops and military and political aid to the insurgency.

(Editing by Peter Cooney)

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