* Firefighters battle blaze in southern Portugal
* Villages evacuated in Algarve region
By Andrei Khalip
LISBON, Aug 4 (Reuters) - More than 740 firefighters battled a forest fire in southern Portugal on Saturday as temperatures climbed to near record highs in the Iberian Peninsula amid a Europe-wide heatwave that has brought drought and wildfires from Greece to Sweden.
Seeking to prevent more deaths after 114 people were killed in two massive forest blazes last year in Portugal, civil protection sent mobile text alerts warning the population of an extreme risk of fires in some regions, including around the capital Lisbon. In Greece, a wildfire killed 91 people last month.
In the coastal resort area of Cascais, outside Lisbon, a power network overload due to heavy use of air conditioning caused a blackout on Friday night, leaving tens of thousands of people without power for several hours and shutting a large shopping mall. In Lisbon, temperatures reached 43 degrees Celsius on Friday.
The blaze began on Saturday in the hilly Monchique area of the southern Algarve region, popular with tourists. Authorities evacuated two villages in the area and 10 water-carrying aircraft were being used to fight the flames.
Hot air from North Africa has caused the most severe heatwave in Iberia since 2003, one of the worst years on record for forest fires.
Temperatures in Spain and Portugal will remain above 40C at least until Sunday, with the IPMA weather service expecting 47C in Santarem in central Portugal later on Saturday, just below Europe's record high of 48C, set in Athens in 1977.
The previous record highs in both Spain and Portugal were just over 47C. Portuguese weather forecasters said the hot air from North Africa also brought particles of sand, which tend to subdue maximum temperatures slightly.
Three men died this week in Spain as a result of soaring temperatures. Two died of heatstroke in the southeastern region of Murcia, Spanish radio Cadena Ser reported, while another man died in Barcelona on Friday, emergency services said.
The Spanish military assisted emergency services fighting a wildfire in Nerva, southern Spain, on Friday and Saturday, but the blaze was now stabilized, emergency services said. Two people were injured and six homes damaged in a separate forest fire near Madrid on Friday, they said.
The longest drought in decades has been drying out rivers in the Netherlands and affecting farmers in Germany. Wheat fields have been devastated across northern Europe, driving up prices.
In Scandinavia, temperatures hit records until a few days ago. In Sweden, July was a record hot month and wildfires burnt in parts of the country.
Temperatures approached 30C this week in Finland, where the August average is 19C. With few air-conditioned homes in the country, a supermarket in Helsinki invited 100 customers to sleep in its air-conditioned store on Saturday.
Authorities on both sides of the Baltic Sea, in Sweden and Poland, have warned against swimming due to a huge bloom of toxic algae spreading because of hot temperatures.
Our Standards: The Thomson Reuters Trust Principles.