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China's National Health Commission said 830 cases had been confirmed so far and 25 people had died as of Thursday.
Most of the cases are in the central Chinese city of Wuhan, where the virus is believed to have originated late last year.
Non-fatal cases have been found in at least seven other countries.
Health officials fear the transmission rate could accelerate as hundreds of millions of Chinese travel at home and abroad during week-long holidays for the Lunar New Year, which begins on Saturday.
Nonetheless, it was a "bit too early" to consider the outbreak a "Public Health Emergency of International Concern," WHO Emergency Committee panel chair Didier Houssin said after the body met in Geneva.
Such a designation would have required countries to step up the international response.
"Make no mistake, though, this is an emergency in China," said WHO chief Tedros Adhanom Ghebreyesus.
"It has not yet become a global health emergency. It may yet become one," he said.
Scrambling to contain the outbreak, the local government in Wuhan, a city of 11 million people in Hubei province, suspended most transport on Thursday, including outgoing flights, and people were told not to leave.
Hours later, neighbouring Huanggang, a city of about 7 million people, announced similar measures.
"The lockdown of 11 million people is unprecedented in public health history," said Gauden Galea, the WHO's representative in Beijing.
The organisation said, however, that it was not yet recommending any broader restrictions on travel or trade.
The previously unknown virus strain is believed to have emerged from illegally traded wildlife at an animal market in Wuhan.
It has created alarm because there are a number of unknowns surrounding it. It is too early to know just how dangerous it is and how easily it spreads between people.
There is no vaccine for the virus, which can spread through respiratory transmission. Symptoms include fever, difficulty breathing and coughing.
1000-BED HOSPITAL BEING BUILT
Wuhan is rapidly building a new 1000-bed hospital to treat victims, mobilising machinery to get it ready by early next week, state media said
It is being built around a holiday complex originally intended for local workers, set in gardens by a lake on the outskirts of the city, the official Changjiang Daily reported on Friday. Prefabricated buildings which will have 1000 beds will be put up, it said.
Building machinery, including 35 diggers and 10 bulldozers, arrived at the site on Thursday night, with the aim to get the new facility ready by Monday, the paper added.
"The construction of this project is to solve the shortage of existing medical resources" the report said. "Because it will be prefabricated buildings, it will not only be built fast but it also won't cost much."
The hospital aims to copy the experience of Beijing in 2003, when the city battled Severe Acute Respiratory Syndrome (SARS). As many as 774 people died in the SARS epidemic, which reached nearly 30 countries.
At the time, Beijing built the Xiaotangshan hospital in its northern suburbs in just a week. Within two months, it treated one-seventh of all the country's SARS patients, the Changjiang Daily said.
"It created a miracle in the history of medical science," the paper added.
The Beijing hospital, built by 7000 workers, was originally designed only to take people who were in recovery from SARS to relieve pressure on other hospitals. In the end it treated nearly 700 SARS patients.