YEA, Australia - A spokeswoman says police have arrested a man in connection with one of the recent deadly wildfires that swept southern Australia.

Victoria state police spokeswoman Marika Fengler confirms a man has been arrested. Respected newspaper The Age reports without giving a source that the 39-year-old suspect is expected to be charged with arson causing death in connection to a blaze known as the Churchill fire.

At least 21 people died in the Churchill fire, one of hundreds that scorched Victoria last Saturday.

The death toll stands at 181 and is expected to exceed 200.

Victoria state police spokesman Chris Nash says the suspect is assisting investigators with their inquiries into the wildfires.

Police say one of Australia's wildfires that struck last weekend was deliberately set near Churchhill.

Meanwhile, a blaze in Australia's nearly burned-out wildfire zone has flared up and is menacing a town in a reminder that the country's worst fire disaster may not be over yet.

The tally of destroyed homes has jumped by 762 to a total of about 1,800 in the wave of hundreds of wildfires that struck Victoria state a week ago.

Australia prepared for a day of mourning, with Prime Minister Kevin Rudd saying it's important for the nation to grieve.

In one of more than a dozen blazes firefighters are still struggling to contain, flames hit a patch of extra-dry timber in a valley about three kilometres from Healesville.

It flared up and sent embers and smoke over the town.

Stuart Ord of Victoria state's Department of Sustainability and the Environment said Friday the fire's been backing down a gully.

"It's obviously either reached some dry fuels, or sometimes in a gully we have erratic winds," Ord said, after fire officials issued a warning that town residents should patrol their properties for airborne embers.

Firefighters raced to take advantage of cooler weather, rain and lighter winds and lit controlled burns Friday in efforts to prevent further breakouts.

Smoke still clouded the sky over part of the 400,000-hectare disaster zone.

More than 400 fires ravaged the state during extremely hot and windy conditions last Saturday. The blazes left at least 5,000 homeless and officials said the death toll could still rise above 200.

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