Kenya has beefed up its security and closed its border with Somalia to halt defeated Islamic militias driven from Kismayo in southern Somalia.
Ethiopian aircraft and artillery are backing Somalia's government
The Islamists say their retreat from advancing Ethiopian and Somali forces is tactical and warns of an insurgency.
A BBC reporter says helicopters and hundreds of army and police have deployed in the border town of Luboi.
The BBC's Bashkas Jugsodaay says a lot of Somali refugees are stranded at the border and are in a bad way.
Somalia's interim President Abdullahi Yusuf met Kenyan leader Mwai Kibaki in Mombasa to discuss security.
An official Kenyan statement quoted Mr Kibaki as urging all parties in Somalia to embrace dialogue, but it made no mention of the border closure.
In a separate development, Ethiopian helicopters pursuing Somali Islamists attempting to escape into Kenya bombed a Kenyan border post by mistake.
Our correspondent says the bombs which landed on the Kenyan side of the border, at Har Har, caused no casualties or damage.
The two-week advance of heavily armed Ethiopian forces ended a six-month Islamist occupation which had brought a degree of stability to large areas of formerly lawless Somalia.
Ten fighters arrested trying to get into Kenya at the weekend were foreigners backing the Islamists, according to Somali's interim government.
But UN Humanitarian co-ordinator for Somalia Eric La Roche expressed concern at the border closure saying it would affect women and children.
Medical aid agency Medicins Sans Frontiers (MSF) plans to send international staff back into Somalia this week if given adequate guarantees. It pulled its international staff out two weeks ago.
Two top Islamist leaders are reported to have been seen south of Kismayo with dozens of armed pick-up trucks following their retreat from Kismayo. Ethiopian forces are said to be in pursuit.
Ethiopian forces are set to remain in Somalia to ensure stability, but splits have emerged over when they may leave.
Ethiopian Prime Minister Meles Zenawi told MPs that he hoped his forces could withdraw within two weeks.
But the prime minister of Somalia's fragile interim government, Ali Mohamed Ghedi, says that heavily-armed soldiers from Ethiopia would be needed for months.
Somalia's weak interim government wants Ethiopian forces to remain in the country until peacekeepers deploy, as they have few well-trained troops and are poorly placed to maintain law and order without help.
But the presence of Ethiopian troops on Somali soil could also damage the government's attempts to win widespread support, the BBC's Karen Allen says.
As if to illustrate the divisions, the deputy prime minister in Somalia's transitional government, Husayn Aideed, has been criticised by the prime minister's spokesman after calling for unity with Ethiopia.
"We share a 2,000km long border. We are brothers. There is nothing that divides us. We want one passport. One army. One security. One economy," he told clan leaders in Mogadishu.
But Abdirahman Dinari said this was definitely not government policy.
On Monday, Mr Ghedi set a deadline of Thursday for all Somalis to hand in their weapons, but this has reportedly borne little fruit so far in Mogadishu.
He has also offered an amnesty to fleeing Islamists if they give themselves up.
European members of the Somali Contact group are due to meet in Brussels on Wednesday to discuss how Europe can help peace efforts in Somalia.