The existence and stability of spatial solitons in one-dimensional binary photonic lattices with alternating spacing and a saturable defocusing type of nonlinearity are investigated. Five types of nonlinear localized structures are found to exist: two in the mini-gap in the energy spectrum and others in the regular gap. It is proved that some of them are stable in certain ranges of the system parameters. Interactions between two identical localized structures propagating parallel to each other are investigated, too. It is shown that this interaction leads to formation of different localized patterns, such as solitons, breather-like modes, and breather complexes. The interaction output depends on the power and type of interacting identical solitons, the separation between them, the width of the mini-gap, and the phase relation between the tails of interacting solitons. © 2012 American Physical Society.