Central African Republic president Francois Bozize has sacked the defence minister - his son, Jean Francis - and the army chief of staff for failing to stop the rebel advance on the capital, Bangui.
Officials say Mr Bozize has taken over as Defence Minister.
The dismissal of Francis Bozize and Gen Guillaume Lapo was announced on state radio.
And now rebel forces say they are halting halted their offensive and will take part in peace talks.
The announcement from the Seleka rebels comes as the country's neighbours say they are sending in extra troops.
Gabon deployed 120 troops on Tuesday and Cameroon was expected to send a similar number.
Since the Seleka rebels began their campaign a month ago, they have taken several key towns and cities, including the diamond centre of Bria.
On Saturday, they captured Sibut city, which is about 150km from the capital, Bangui, after government forces withdrew.
It is the biggest threat President Bozize has faced since he took power in a coup in 2003.
Both the US and France, the former colonial power, have rejected a plea by the Government for help to defeat the rebels.
However, neighbouring states agreed to bolster the Central African Multinational Force (Fomac), which was deployed to the CAR in 2008 to help end years of unrest.
Speaking to BBC Afrique before news of his dismissal, Francis Bozize said Fomac troops had been deployed to Damara, 75km from the capital.
Fomac commander General Jean-Felix Akaga warned the rebels against any attempt to take Damara, the last strategic town between them and Bangui, AFP news agency reports.
"We will not give up Damara," he was quoted as saying.
Damara resident Bertin Andjipassera told Reuters newsagency that people have been fleeing their homes.
"Everybody in Damara has gone into the bush, even our wives, our children are in the bush... The hospitals are not working.... There's nothing, just suffering."
Francis Bozize said 120 Gabonese soldiers had arrived in the CAR on Tuesday to bolster the regional force.
A similar number of troops from Cameroon were expected on Wednesday, and they would be followed by a contingent from Congo-Brazzaville, he added.
BBC West Africa correspondent Thomas Fessy says the rebels' capacity to take on these reinforcements is not known and the regional military build-up may well have worked as a deterrent.
Seleka spokesman Eric Massi told journalists the rebels had been ordered to halt their advance.
"I have asked our forces not to move their positions starting today because we want to enter talks in [Gabon's capital] Libreville for a political solution," he told Reuters on Wednesday.
"I am in discussion with our partners to come up with proposals to end the crisis, but one solution could be a political transition that excludes [President] Bozize."