Birmingham walk away from Dembele and Camoranesi deals
Boss Alex McLeish admitted that he had been frustrated by the negotiation process for Camoranesi.
"I have always been a big admirer but negotiations became protracted and I had a further think," he said.
"I decided it was not quite the way forward for Birmingham at this particular time."
The Scot also confirmed that Dembele had decided against a move to the Midlands club in the wake of other offers coming his way.
"Dembele has got other options and he is choosing another option. His representative had told me that.
"It is a blow because we have worked hard on that one - but that's life."
McLeish claimed that the Blues will still make new signings before the end of the transfer window, with Wigan's Charles N'Zogbia rumoured to be considering a move to St Andrews.
"We are looking at one or two things and I'm confident we will have players in by the second game of the season rather than the first one at Sunderland," he said.