City cancels July Fourth fireworks as wildfire rages

Officials have cancelled an annual Fourth of July fireworks celebration in a northern California community as an estimated 26,000 residents remained displaced by a growing wildfire.

The Thompson fire broke out before noon on Tuesday about 100km north of Sacramento, near the city of Oroville in Butte County.

It sent up a huge plume of smoke that could be seen from space as it grew to more than 14 square kilometres.

Oroville Mayor David Pittman said there was a "significant drop in the fire activity" on Wednesday, and he was hopeful some residents could soon be allowed to return home.

The fire's progress was stopped along the southern edge, and firefighters working in steep terrain were trying to build containment lines on the northern side.

By Wednesday evening, containment stood at seven per cent.

"On that north side they have some real struggles in terms of the topography," Pittman said.

More than a dozen other blazes, most of them small, were active across the state, according to the California Department of Forestry and Fire Protection, or Cal Fire.

A new fire on Wednesday afternoon prompted brief evacuations in heavily populated Simi Valley, about 70km northwest of downtown Los Angeles.

The state's largest blaze, the Basin fire, covered nearly 57 sq km of the Sierra National Forest in eastern Fresno County and was 26 per cent contained.

In Oroville, a state of emergency was declared on Tuesday night and evacuation centres were set up.

The evacuation zone expanded on Wednesday into foothills and rural areas beyond the city of about 20,000 people.

With July Fourth in mind, authorities warned fireworks were banned in many places, including most of Butte County.

Authorities also cited the ongoing evacuations and damage caused by the Thompson fire for the cancellation of Oroville's fireworks show, which had been specially permitted.

California State Parks officials said many agencies had a large number of resources responding to the blaze and were working to get everyone back home as quickly as possible.

There was no immediate official report on property losses.

The fire ignited sprigs of grass poking from the concrete edges of Lake Oroville as gusty winds whipped up American flags lining a bend of the state's second largest reservoir and the nation's tallest dam.

The cause of the blaze was being investigated.

Red flag warnings for critical fire weather conditions were in effect when it erupted.