WordPress friendly url problem – error 404

I am not really experienced in writing htaccess rules but I did successfully managed it earlier on some other WP site. I would like to enable friendly links.

In server root I added .htaccess with following code:

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress

Also in WP Permalink settings I enabled Custom structure: /%postname%

Problem is that all links are now friendly written and displayed correctly but none of the posts are available. I am receiving error 404 on all pages except home.

Old working link is:
http://domacifilmovi.info/?videos=mali-svet
New one with 404 error:
http://domacifilmovi.info/videos/mali-svet

Don’t know if has anything to do with, but I am using WordPress SEO by Yoast plugin with default settings.

Thanks in advance.