By Penny Spiller
BBC News Online
Relief workers have constructed tented cities on the outskirts of Bam to house those who survived the devastating earthquake.
People are starting to move to camps outside the city
But up until a couple of days ago, they were virtually empty.
People whose homes were reduced to rubble had chosen to remain close to where their belongings are buried, and in most cases, where loved ones perished.
It has made the task of locating survivors, and allocating food, shelter and aid, much harder for relief workers.
But Mostapha Mohaghegh of Iran's Red Crescent says people's desire to remain close to their homes is understandable.
"Many have family and friends buried under the rubble, and property," he said. "We haven't wanted to push people into moving away until they are ready to go."
Red Crescent teams are still in the process of mapping the remains of the historic city to identify where people are located.
But they are confident that most now at least have tents, blankets, food and water to protect them from the worst of the winter cold.
James Addis, of World Vision, says the biggest concern at the moment is ensuring people have access to decent sanitation.
"As we go out into Bam and the outlying villages, people are saying to us that they are not able to wash themselves or have access to proper toilets," he told BBC News Online.
"Many families are sharing outside toilets and we are very concerned about the health implications of that. I think the only reason we have not yet seen incidences of water borne diseases is because it has been cold, particularly at night."
Mr Addis said World Vision was working to install temporary latrines around the city in a bid to prevent an outbreak of disease.
Despite people's desire to stay close to home, aid agencies hope that many might now consider moving out to the camps.
The city continues to be rocked by regular tremors, and any buildings still standing are unstable and dangerous.
A family of four were injured after a wall fell on them, and the young child was brought into hospital with a broken arm.
Dennis McLean, of the International Federation of the Red Cross, says it will help speed up the process of rebuilding Bam if people begin to move to the camps, now they are fully up and running.
"It is going to be very difficult to clear up the city, and start rebuilding it, if there continue to be lots of homeless people there," he said.
He said an aim of the appeal, launched on Friday by the Red Cross and United Nations, would enable them to keep the camps fully supplied during the winter months.
The Islamic Relief charity is helping to manage one of the camps on the edge of Bam.
"Until a few days ago, there was no-one in the camps expect aid staff," said Islamic Relief's Adeel Jafferi. "Now there's around 400. We expect eventually to have around 3,000 people."
He said new arrivals were getting tents, blankets, stoves, cooking pots, soap, washing powder, hygiene kits dustbins and jerry cans.
Iranian President Mohammad Khatami has pledged to rebuild Bam in two years, but it is not known if people will have to remain in camps during that time.
Survivors remained near their homes in the days after the quake
The Iranian Red Crescent is managing the camps and Mr Mohaghegh admits it is difficult to predict how long they will be needed - or how many people may eventually use the camps.
"We hope that this temporary solution will remain temporary. Currently, we are making provisions for at least 5,000 families, but we are trying to be flexible," he said.
"We are encouraging the government to start the reconstruction of the city as soon as possible," he said.
Mr Mohaghegh paid tribute to the teams of relief workers who have worked flat out to enable the people of Bam to begin rebuilding their lives.
He said one local volunteer lost at least five of his relatives in the disaster, but has "a strength of spirit and has worked flat from the moment he arrived".
Relief workers in turn spoke of the incredible generosity and gratitude shown by the people of Bam, and the way they have dealt with the disaster so far.
"People have been through a huge emotional trauma - most have lost several relatives," said James Addis.
"Yet they have been kept busy and active focusing on their immediate needs. I think when people are eventually able to sit back a little from the situation, then the enormous losses they have suffered will start to hit".