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California Gov. Pete Wilson (R) said he and legislative leaders "made pretty good progress" on cutting aid to local governments on Saturday. California has been without a budget since June 1. Negotiations were scheduled to resume yesterday afternoon.... A blaze apparently ignited by a campground fire raged out of control yesterday near Yosemite National Park, burning more than 3,500 acres and forcing thousands to evacuate. No injures were reported. EUROPE

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Croatians voted yesterday in their first general elections since winning independence from Serb-led Yugoslavia, and their nationalist president, Franjo Tudjman, said he was confident of victory.... Azerbaijan has vowed never to accept the secession of Nagorno-Karabakh and since June has launched a military offensive to recapture positions lost to the territory's Armenian community in May. The situation worsened as Azeri and Armenian forces clashed in the enclave yesterday.... Britain's economy is mired i n recession with industrial orders and output falling, two influential reports on the economy said today.... An EC demand for Sweden to make binding commitments for joint security may make the neutrality question a make-or-break issue for joining the Community.... Serb nationalists have set up two concentration camps in Bosnia in which hundreds of civilians are being executed or starved to death, according to a report published yesterday in Newsday. MIDDLE EAST

Israeli soldiers killed a Palestinian and wounded another in a gunfight in the Gaza Strip yesterday.

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