Evacuation orders lifted as crews gain on massive Idaho wildfire SALMON, Idaho (Reuters) - Firefighters gained ground Tuesday on a wildfire threatening the ski resort town of Sun Valley, Idaho as evacuation orders were lifted for hundreds of homes and officials said they had "turned the tide" against the wind-whipped blaze. The so-called Beaver Creek fire has destroyed one home and seven other buildings and forced the evacuation of thousands. It was sparked by lightning nearly two weeks ago outside Sun Valley, one of three tourist communities that make up a resort area in central Idaho valued at $8 billion. Blaine County Sheriff Gene Ramsey on Tuesday told occupants of 600 homes in upscale developments south of the twin towns of Sun Valley and Ketchum that they could return but should be prepared to leave at a moment's notice. That brought to 1,250 from a high of 2,250 the number of houses under a mandatory evacuation order in the path of a fire that has prompted the ski resort in Sun Valley to keep flames at bay by turning on water cannons usually used to make snow. "I think the tide has turned in our favor today," Blaine County spokeswoman Bronwyn Nickel said. The general energy and optimism has increased. We're by no means out of the woods but people are starting to worry a little less. More than 1,800 firefighters are assigned to a blaze that has raged across 106,000 acres of drought-stricken sagebrush flats and pine forests in the Sawtooth Mountains. Lower temperatures and higher humidity levels on Tuesday allowed firefighters to attack the fire directly instead of being on the defensive, fire information officer Richard Reuse said. The fire has strained the area's tourism economy at the height of a summer recreation season tied to camping, hiking and biking. The resort area known as the Wood River Valley is home to such celebrities as singer Barbra Streisand, director Steven Spielberg and actor Tom Hanks. Elite firefighting units known as hotshots worked on the ground while helicopters dropped fire retardant on a flank of the fire that had advanced on Ketchum and crews protected homes that have been guarded by fire engines. The flames were less than 10 percent contained. But fire managers said they were making headway thanks to calmer winds and because of sustained ground and air attacks that began on Sunday. The Beaver Creek blaze is one of dozens of fires raging across Western states that have strained U.S. Forest Service resources because of federal budget cuts known as sequestration. Officials with the National Interagency Fire Center in Boise said the indicator of fire preparedness, a measure of the demand for firefighting resources like crews and aircraft, has been raised to the maximum level for the first time since 2008. Asked if the budget cuts played a role in the decision to ratchet up the index, the center's Roberta D'Amico said, "There has been some adjustment this year because of sequestration. We are in a situation where funding is tight. We do have to evaluate where to put resources and there has been a modest impact from sequestration. Elsewhere in Idaho, a fire advancing on a small mountain town east of Boise quadrupled in size on Tuesday, growing from 2,000 acres on Monday to 8,000 acres. The blaze has forced the evacuation of 65 homes in the community of Atlanta, which is fewer than four miles from advancing flames, federal fire information officer Arnold Hartigan said. Meanwhile, in Northern California, a wildfire that has already charred more than 10,000 acres and destroyed two homes was threatening some 2,500 other structures west of Yosemite National Park. Authorities closed Highway 120, east of Modesto, and said no traffic was being allowed out of the westbound entrance to Yosemite. More than 450 firefighters were battling the so-called Rim Fire, which broke out on Saturday afternoon, but officials said it was zero percent contained as of Tuesday afternoon and burning in steep, remote terrain that was difficult for crews to access. Editing by Dan Whitcomb and Dan Grebler