(Reuters) - At least 12 people were killed and 2,000 houses destroyed over the weekend by a fire that devastated parts of the Chilean port city of Valparaiso, as authorities evacuated thousands and sent in aircraft to battle the blaze.

Pushed by strong Pacific coast winds, the fire started on Saturday and rampaged over 700 hectares (1,700 acres) of forest and hilly residential neighborhoods including La Cruz and Las Canas, authorities said.

"It is still not completely extinguished," said local government official Ricardo Bravo, referring to lingering pockets of fire still burning in the higher parts of the city Sunday night.

During the day firefighters used planes and helicopters to drop water on the flames in the city 135 km (85 miles) northwest of Santiago, where makeshift shelters started taking in the newly homeless.

Valparaiso's rolling hills and closely spaced houses, many of them made of wood, make it difficult to combat fires. The city, part gritty port town and part bohemian retreat, has a large number of poor people.

By Sunday Valparaiso had become a stench-filled scene of smoke, ash and sirens as residents picked through their gutted properties.

"We are looking for something to remember our home by, but there's nothing," Jose Miguel Rivera, 59, told Reuters as he sifted through the ashes where his house used to be. "We are thinking about rebuilding."

The Chilean Congress, which is housed in Valparaiso, was spared by the blaze, as was the city's historic quarter with its late 19th century architecture.

"We fled from the La Cruz neighborhood, from an apartment I just got not too long ago. It's all burned down, my sister's house also burnt to the ground," said Rosa Guzman as she stared helplessly up at the hills.

There were no reports that exports of copper in the world's No. 1 producer of the metal were affected by the fire.

President Michelle Bachelet declared a state of emergency and sent the army to maintain order in the city. Marines patrolled the streets while ambulance crews treated people for smoke inhalation and other injuries.

This is the second emergency that Bachelet has faced in the first month of her new term, after an 8.2 magnitude earthquake slammed northern Chile at the start of April.