We investigate, experimentally and theoretically, light propagation in one-dimensional waveguide arrays exhibiting a saturable self-defocusing nonlinearity. We demonstrate low-intensity "discrete diffraction", and the high-intensity formation of spatial gap solitons arising from the first band of the transmission spectrum. The waveguide arrays are fabricated by titanium in-diffusion in a photorefractive copper-doped lithium niobate crystal, and the optical nonlinearity arises from the bulk photovoltaic effect. © 2005 Optical Society of America.