VALPARAISO, Chile (AFP) - Thousands of residents began returning to their Valparaiso homes on Saturday, hours after fleeing a still-smouldering forest fire that threatened the treasured Chilean seaport city, a Unesco World Heritage site.

The fire claimed one life and led to thousands of evacuations in the historic city known as the "pearl of the Pacific."

But while it kept raging Saturday and was responsible for numerous injuries overnight, authorities said the fire no longer poses a risk to human life.

Most of the 7,000 people who had been evacuated after Chile declared a state of emergency on Friday were permitted to return home, after the fire's "marginal" nighttime spread, according to one official.

But high temperatures and strong winds prevented fire crews from completely extinguishing the flames, particularly on the city's hillsides, said Deputy Interior Secretary Mahmud Aleuy.

"We are working on the fire's edges, to halt its spread," he told a press conference.

National Emergency Office chief Ricardo Toro said that "the fire now has been contained. But it is not entirely out."

The fire started at a landfill in an area of grassland and pine forest near a major thoroughfare connecting Valparaiso with several villages.

Six civilians and 15 firefighters were reportedly injured, with two of the fire crew in serious condition.

A 67-year-old woman died from a heart attack, authorities said, after the national emergency office declared a red alert for Valparaiso and the neighbouring city of Vina del Mar.

A total of 300ha of land was burned, no houses were destroyed and all evacuees had been permitted to return home except for around 50 who remained in shelters, Aleuy said.

"We were five minutes from having our apartment burn up," sighed evacuee Juan Salmora. "The lights went out, people were panicking and it was total chaos."

'NO MAJOR DIFFICULTIES'

The port city, visited by thousands of tourists every year, is still rebuilding following deadly blazes in April that killed 15 people.

"We have no major difficulties," said Aleuy, in sharp contrast with last year's fire, which destroyed thousands of homes, particularly in the city's poorer neighborhoods.

The wooden structures with their tin roofs, perched precariously on the coastal city's tinder-dry hillsides, had been quickly engulfed.

"The situation distresses the population, which still lives with the memory of last year's fire," said Jorge Castro, mayor of the city of some 270,000.

Authorities, who asked the public to avoid traveling to the region, have dispatched soldiers and police for night patrols, and sent seven aircraft and eight helicopters.

Meanwhile, the main road leading to Santiago was closed due to the flames, which lapped dangerously close to a power plant and high voltage towers at certain points during the night.

Valparaiso's historic centre is known for its cobbled streets and coloured houses dating from the city's glory days in the mid-19th to early 20th century.

The city, located about 120km from the capital Santiago, became famous as a stopover point for ships steaming down South America heading toward the continent's southern tip and then the Atlantic Ocean.

It is also famous for its iconic funicular railways up the hills, which are still in use.