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Diplomats say his Lord's Resistance Army is forcibly recruiting fresh fighters and acquiring new arms in neighbouring countries.
His fighters are reported to have attacked South Sudanese forces, killing 13 troops and seven civilians.
Uganda's President Yoweri Museveni and the region's armies have this week all suggested taking military action.
The LRA is believed to be digging up arms caches and resuming their usual practice of abducting civilians, who are then press-ganged into acting as fighters, porters or concubines.
This is said to be taking place in a large area encompassing parts of the Democratic Republic of Congo, the Central African Republic and Sudan.
Around 1,000 new recruits have been added to around 600 existing combatants.
There are also reports that Chadian rebels have been seen offering them fresh supplies of weaponry.
Elusive
Former Ugandan peace envoy Betty Bigombe says it is a tragedy that Mr Kony refused to sign the peace deal agreed by his representatives after two years of talks in April.
"I still hope he will re-consider and sign," she told the BBC.
But President Museveni has regional support for military action.
Earlier this week, senior army officers from Uganda, South Sudan and DR Congo agreed on a plan to launch a joint military operation to crush the LRA.
However, BBC Africa analyst Martin Plaut says this strategy has been tried many times before, and even with Western backing, no-one has ever been able to capture or kill the elusive rebel leader.
Earlier, the Catholic Archbishop of Gulu in northern Uganda called for a peace deal between the government and the LRA.
Archbishop John Odama warned that the failure to achieve peace would destabilise the region and reverse the progress made during the peace talks.
"If we go now for war, it means we're throwing all this away," he said.
"This war was national and it has gone now to what we call regional, and therefore it is spreading. If it can be stopped before it goes to that extent, the better for Africa," he said.
Throughout the peace talks, in the South Sudan capital Juba, Mr Kony remained in DR Congo, while he and his top commanders were the subjects of arrest warrants issued by the International Criminal Court in The Hague.
He is accused of numerous war crimes, including mutilating and abducting civilians and forcing thousands of children into combat.
(BBC)
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