Well, if you don't feel that way about her I guess the best thing to do is to just say that you don't share the same orientation as she does and that she is simply one of the kindest people that you have ever come across and one of your closest friends.
What I'd also suggest to you would be NOT to avoid her and to deliberately not spend time together, (this goes for all situations like this, not just girl & girl) because even if you say to her "You're my best friend but I don't like you like that" but then choose to ignore her and avoid her in the hope her feelings change then you'll probably end up making her feel like shit and she will start panicking about losing a friend and you'll end up wondering if it was worth losing a friend just to avoid the awkwardness. Don't be afraid to face the situation, just be compassionate, understanding and just remember that you're dealing with one of your closest friends.