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Firefighters were evacuating the white-walled town of Bensafrim, home to about 2,000 inhabitants, as well the two smaller villages of Odiaxere and Farta Vacas, said the director of the national centre for rescue operations, Gil Martins.
"This situation arose because one of the fronts of the fire is being blown by strong winds, which has caused firefighters to lose control of the situation," he told reproters.
Emergency workers had already evacuated some 60 residents of an old people's home in Bensafrim earlier on Wednesday because of the heavy smoke from the fire which was burning on the outskirts of the town.
"It is a very complicated situation, the fire is out of control and it is burning along many fronts. There is a lot of smoke, people are very nervous," the mayor of the town, Joao Gomes, told private radio TSF.
Firefighters were digging ditches around the town, some 250 kilometresmiles) south of Lisbon, to block the advance of the fire, which has been burning for five days.
Local residents were in some cases using water from the swimming pools of their homes to protect their properties, images on local television showed.
Just to the east, near the town of Silves, firefighters were battling several new outbreaks of a blaze which has already ravaged some 10,000 hectares (25,000 acres) of land and burned several homes since it erupted on Tuesday.
Some 450 firefighters and troops equipped with more than 100 firetrucks struggled in high temperatures at the scene of both fires to keep the blazes away from the populated areas and popular resorts further south along the coast of the Algarve.
More firefighters and soldiers were expected to arrive from Lisbon at the scene of the two fires later on Wednesday.
Firefighters were being aided by 10 water-dropping aircraft, including three German helicopters, but the thickness of the smoke -- visible from satellite images -- was limiting their use.
"Visibility is extremely reduced," Martins said.
A main road in the region was shut to traffic, and cars in the area were forced to drive during the day with their lights on because of the dark smoke, local media reported.
Firefighters said the flames were being whipped by quickly changing winds, and some of the flames were raging at inaccessible heights in the mountain range behind the coast.
Authorities believe both fires burning in the Algarve were started deliberately.
Rescue workers had already evacuated some 200 mostly elderly residents from four villages in the mountains of Monchique near Bensafrim on Monday.
Until Friday the Algarve had escaped the wave of fires that has swept Portugal since the end of July, causing nearly one billion euros (1.1 billion dollars) in damage.
Nearly half of the the more than 12 million foreign tourists who visited Portugal last year headed to the Algarve, known for its sandy beaches and green golf courses.
There are more than 100,000 holiday homes in the Algarve, many of them owned by northern Europeans.
Forestry officials estimate 215,000 hectares of land, an area almost as big as Luxembourg, have been devasted by fire so far this year.
Fires were burning in a total of six of Portugal's 18 regions on Wednesday, mostly in the centre and south of the country.
Police have arrested some 60 people so far this year for allegedly starting fires, including an 18-year-old shepherd who is accused of sparking the Monchique blaze on Friday.
TERRA.WIRE |