This was heard at a hearing into the legality of the 700-kilometre long structure.
"My country already hosts a huge number of refugees and displaced persons", said Prince Zaid bin Raad, the head of Jordan's delegation to the International Court of Justice.
"We are faced with the threat of a new wave of refugees as result of the wall's construction."
Raad was addressing the court on the second day of the case brought by the Palestinians and boycotted by Israel.
While Israel has dismissed most of the other countries making presentations at the court as intrinsically hostile, Jordan's arguments could upset the state's relationship with one of just two neighbouring countries which recognise it.
Raad acknowledged Israel's right to defend itself against the "horrific" wave of attacks which the government of Ariel Sharon says the barrier is designed to prevent.
But he added it did not justify construction on parts of the West Bank which were previously under Jordanian control until the 1967 Six Day War.
"Much of the wall now being built by Israel is in territory that does not belong to Israel, but is in fact occupied territory", said the prince who is Jordan's ambassador to the United Nations.
"Much of the wall now being built by Israel is in territory that does not belong to Israel, but is in fact occupied territory"
Prince Zaid bin Raad,
Head of Jordan's delegation to the ICJ
"If the wall had been constructed wholly within Israel's sovereign territory, these proceedings would not have come about."
Instead the barrier was "aimed at further assimilation of occupied territories into the state of Israel."
Israel has argued the case is beyond the court's competence, and has warned it will undermine the troubled road map which is meant to bring peace to the Middle East.