At the small seaside town of Vakarai, 50km north of Batticaloa and controlled by Tamil Tigers, aid workers and locals are struggling to cope with an influx of panicky, exhausted people.
Unicef country representative, Joanna Van Gerpen, said: "The health system in the town has really broken down.
"There's not enough food getting through and there is very restricted access to these people for aid agencies."
For help to get into Vakarai, it must pass through the frontline in fighting between the Liberation Tigers of Tamil Eelam (LTTE) and government forces, with only the UN and the International Committee of the Red Cross (ICRC) allowed to go over.
As of October 16, the UN reported 36,716 Internally Displaced Persons (IDPs) in Vakarai, most of them Tamils who had fled from fighting in and around the northeastern city of Trincomalee, earlier in the year.
Unable to leave
Now though, these internal refugees are unable to leave the town - either to return to their homes in the north or to continue south, as the fighting has spread all around them.
"Last week, there was shelling along the road into Vakarai too," said one aid worker, who declined to be named in case it led to further access problems. "We had to pull back. This area is one in which there are always military operations going on."
Up to 160 people seek services at
the Vakarai hospital every day
Meanwhile, in Vakarai, conditions are worsening.
T Varatharajah is the only doctor in the town. An IDP himself, he came across thousands of refugees sheltering there while he too was escaping south - so he decided to stay.
"The hospital in Vakarai was destroyed by the tsunami back in 2004," he told Aljazeera.net by satellite phone from the town, which has been closed to journalists by the army and the LTTE.
"The administrative block wasn't so badly damaged, though. We rigged up a temporary roof and we've divided it into male and female wards, but we don't have enough medicine or fuel or staff."
Unicef estimates that about 150-160 people seek Dr Varatharajah's help at the makeshift hospital every day.
There is a small window of a few hours in the morning when aid convoys can bring in drinking water and medical supplies from the Sri Lankan government and aid agencies. After that though, the front is closed again.
Old school classrooms have been
turned into temporary shelters
Dysentery and diarrhoea now affect around half those in the makeshift camps that have sprung up around the town.
"The problem is that these people got caught in the middle," says Brigadier Prasad Samarasinghe, military spokesman for the Sri Lankan ministry of defence.
"In government areas we can look after them 100%, but in LTTE-controlled areas, although food is being sent in by the government, with the assistance of the NGOs, the UN and ICRC, there are many basic problems. These people need to be resettled immediately, but the area is not clear [of LTTE]."
Yet the LTTE, which wants an independent homeland for Tamils on the island, accuses the government of causing the problem.
Daya Master, LTTE spokesman, told Aljazeera.net that "Vakarai is an LTTE-controlled area and because of this, the government is blocking food and humanitarian aid.
"The government has to take steps to end this."
Meanwhile, the refugee problem continues.
Christina de Bruin, Unicef's representative in Batticaloa, the regional capital, said: "Some of those in Vakarai fled fighting in Trincomalee as long ago as April.
"Many of the families now hosting arriving IDPs there are IDPs themselves."
The refugees in Vakarai are also part of a human wave of nearly 200,000 people who have abandoned their homes since a 2002 ceasefire began to fall apart back in April.
They have joined about 300,000 more who had been displaced by earlier fighting in the long war between government forces and the LTTE.
Only in name
In that conflict, which began in the late 1970s, nearly 64,000 have been killed, more than 1000 since August alone.
Last weekend, both sides sat in the Swiss city of Geneva for peace talks, with many hoping this would lead to a resumption of the ceasefire, which applies now only in name.
But the talks collapsed and, on the ground, shelling has resumed.
For those in Vakarai, any end to hostilities could not have come soon enough.
Nearly 40,000 refugess are now
crammed into Vakarai town
"These people fled here with nothing," says Dr Varatharajah.
"They have just the clothes on their backs - no bedding, no sheets, nothing. They are also all very frightened. Daily life here is dangerous, with shelling and bombing. The hospital compound hasn't been hit, but the shells are falling close by.
"They can't go back or forward so there is great despair. For most people, you go to sleep not knowing if you will wake up tomorrow morning."