Kenya has shut its border with Somalia and will not allow more refugees into the country, says its foreign minister.
Thousands of Somalis have sought refuge in Kenya over the years
Earlier the Kenyan authorities deported more than 420 Somali refugees who had crossed the border in recent days.
The UN refugee agency has condemned Kenya's actions, with aid workers expressing frustration at being unable to help Somalis fleeing conflict.
There have been clashes near the Kenyan border with Islamist militias being pursued by Ethiopian and Somali troops.
Kenya has deployed tanks and helicopters to enforce the border closure.
The recent advance of heavily armed Ethiopian troops has ended a six-month Islamist occupation which had brought a degree of stability to large areas of formerly lawless Somalia.
But the Islamists say their retreat is tactical and have threatened to launch an insurgency.
Kenyan Foreign Minister Raphael Tuju told reporters in the Kenyan capital, Nairobi, that they have now asked the transitional government and Ethiopia to establish internally displaced people camps in Somalia.
"We are not able to ascertain whether these people are genuine refugees or fighters and therefore its best that they remain in Somalia," said Mr Tuju.
Mr Tuju also dismissed UNHCR criticism as misguided.
"Kenyans are overburdened, in fact Europe and America does not give us enough aid to support these refugees and it's not a written rule that when there is fighting in Somalia that people should run to Kenya, other nations should also take the burden," he said.
The Somali refugees, mainly women and children, were deported after being taken from the border transit camp at Liboi in north-east Kenya in government trucks.
Earlier, UNHCR spokesperson Millicent Mutuli said the Kenyan Red Cross had been denied access to them for four days.
"It's against international law to deny people access to humanitarian assistance under such circumstances," said Ms Mutuli.
UNHCR head Antonio Guterres said deserving Somali civilians should be entitled to seek asylum in Kenya.
Meanwhile, Ethiopia and Somali government forces, with air support, have captured the Somali border town of Doble, where it is reported that around 4,000 refugees have been stranded.
The BBC's Bashkash Jugsodaay in Liboi says that the Islamist militia who formerly held Doble fled late on Tuesday night in about 100 technicals - machinegun-mounted pick-up trucks - carrying an estimated 600 to 700 fighters.
The Somali interim government's spokesman Ali Jama told AFP news agency that their forces were in pursuit of top Islamist leaders in dense border terrain.
"We are yet to pin-point where they are, but we believe they are hiding in the border forest," he said.
After European members of the Somali Contact group met in Brussels, Swedish Foreign Minister Carl Bildt called for peace talks.
"There has to be a withdrawal of the Ethiopian forces. There has to be a political process, an inclusive political process in Somalia."
The European Union is the largest aid donor to Somalia and has been heavily involved in the mediation process.
Somalia's interim President Abdullahi Yusuf is in Nairobi for talks with diplomats, while Ugandan President Yoweri Museveni is to travel to Ethiopia on Thursday to discuss the possible deployment of Ugandan troops to Somalia.
Uganda is the only country to have made a firm commitment - of up to 1,000 soldiers - towards a planned African peacekeeping force for Somalia.
A deadline of Thursday has been set for Somalis in the capital to hand in their weapons, but the process has begun slowly.