From what you have said, it seems that this girl is attracted to you and is flirting. If you are interested in her, it's a very positive sign. If you don't have feelings for her, you don't have to end the friendship. Gently discourage the flirting, but continue to do things that friends do together. She is probably trying to work out if you are gay and attracted to her. Perhaps you could share with her about someone else you find attractive just to give her the hint. It is perfectly fine for someone who is not gay to have a gay friend, and plenty of gay people are friends with each other without being attracted.