About 200 firefighters continued to battle the blaze, which started Friday afternoon at an illegal dump and was quickly spread by strong winds, leading officials to declare a state of emergency.
By yesterday afternoon, officials said the fire had been hemmed in, but warned that high temperatures, low humidity and strong winds remained a danger to rekindle the blaze. The alert remained in effect.
"The fire is not controlled, but it is contained," Deputy Interior Minister Mahmud Aleuy said. "What has been done is work to contain so the fire cannot expand."
The fire comes nearly one year after a wildfire tore through Valparaiso neighborhoods, leaping from one hilltop to another. The blaze killed 15 people, injured more than 500 and destroyed nearly 3,000 homes.
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No houses were reported damaged from the latest fire, which Chile's Emergency Office estimated had affected about 740 acres (300 hectares) by early yesterday.
The government asked people to avoid traveling to either of the coastal cities, both of which are popular weekend destinations, especially during the Southern Hemisphere's summer months.
The city, known for its colourful, tightly packed neighborhoods which hug steep hillsides, was declared a UN World Heritage Site in 2003.