The camp in Tongo, in Western Ethiopia, is a few hundred kilometres from the main border crossing refugees are using.
Since the United Nations opened it on Wednesday, about 500 homeless people have settled, but it is big enough to house 3,000 people and could be expanded.
More than 27,500 people have left Sudan’s Blue Nile state for Ethiopia in the past month, amid fighting between the Sudanese army and rebels, the Sudan People’s Liberation Army - North. About 16,500 of these people are living in towns and villages near the border crossing points. And many are sleeping out in the open, raising their risk of illness and disease. And with fighting in Blue Nile still carrying on, UN officials predict the numbers will continue rising.
The UN is now working with the Ethiopian government to get the refugees moved to safe places. The first people fleeing Sudan for Ethiopia were mainly women, children and old people, while the men stay behind to look after their houses. But recently officials working at the border points have seen more men arriving, and more injured people. Some have arrived with bullet and shrapnel wounds and one man had lost his legs in a bomb blast.
Sudan last month declared a state of emergency in its Blue Nile region after violence erupted in the state, on South Sudan's border. Blue Nile is the third border area to see fighting since South Sudan became independent in July. In the neighbouring region of South Kordofan, about 200,000 people have fled their homes. The two governments are still to agree a common border and how to share their oil resources and pre-separation debt - all issues which are stoking tensions.
The UN and other aid organisations have appealed for £12 million to help the tens of thousands fleeing Blue Nile into western Ethiopia. The joint appeal by the UN High Commissioner for Refugees, the UN Children’s Fund the World Food Programme and International Organization for Migration, is aimed at helping as many as 35,000 refugees.
The east African country has been troubled by fighting for years. Two rounds of north-south civil war cost the lives of 1.5 million people, and a continuing conflict in the western region of Darfur has driven two million people from their homes and killed more than 200,000.