(Adds quotes from Rice, details, paragraphs 9-11)
WASHINGTON, Nov 13 (Reuters) - U.S. Deputy Secretary of State John Negroponte will visit Pakistan this week to urge President Pervez Musharraf to end emergency rule and hold elections, the State Department said on Tuesday.
"We continue to want to see elections move forward and move forward in a free, fair and transparent manner. We want to see the emergency decree lifted," U.S. State Department spokesman Tom Casey told reporters, summarizing Negroponte's message.
He said Negroponte was expected to be in the nuclear-armed South Asian nation, a long-time U.S. ally and major aid recipient, at the end of the week.
Casey said he did not know whether Negroponte would meet Musharraf, who seized power in 1999 in bloodless coup but was embraced by the United States when he agreed to help Washington in its struggle against al Qaeda after the Sept. 11 attacks.
Musharraf declared emergency rule on Nov. 3 and has suspended the constitution, sacked judges, locked up lawyers and rounded up thousands of activists in what is widely regarded as an effort to cling to power.
Pakistani officials on Monday placed opposition leader Benazir Bhutto under house arrest for seven days in the provincial city of Lahore, a move that appeared designed to prevent her from leading protests against emergency rule.
Bhutto on Tuesday called for Musharraf to step down as president, dealing a blow to U.S. hopes that the two might find a way to share power.
U.S. Secretary of State Condoleezza Rice noted Musharraf's announcement that he planned to hold elections in January -- backing away from plans to delay them until mid-February -- but stressed the need for them to be free and fair.
"The most important thing is to get out of this state of emergency so that something like normal life can return to Pakistan," Rice told a Tennessee radio program, according to a State Department transcript.
"You can't have free and fair elections with the kinds of restrictions on the media that you have, with the kinds of restrictions on assembly of opposition," she added. "Clearly, some things are going to have to change on the ground before those elections can be held."
Negroponte, a former U.S. intelligence chief and ambassador to Iraq and at the United Nations, was expected only to visit Islamabad, Casey said, adding this made it unlikely that he would see Bhutto because she is not in the Pakistani capital.
He also said Bhutto should not be under house arrest.
"We think that she ought to be able to go about her business as she sees fit without restrictions ... and that applies not only to her, that applies to all the people who have been subject of any kind of detention," he said.
The No. 2 U.S. diplomat will travel to Pakistan at the end of his current visit to Africa, the spokesman said, adding he did not know exactly when he would arrive in Islamabad but that it should be at the end of the week.
Casey also told reporters that to his knowledge there was no legal requirement for the United States to cut off aid to Pakistan, which has received about $10 billion in U.S. funding since 2001, but he said a review of the matter was under way.
Separately, Pentagon press secretary Geoff Morrell said Washington was not seeking to punish Pakistan.
"There is no urgency to punish Pakistan at this point. There is an urgency to help Pakistan get on the road to democratic rule as quickly as possible," he said.
"There may be more carrot than stick at work right now. That said, there is this review (of U.S. aid) under way," he added. (Additional reporting by Kristin Roberts; Editing by David Alexander and David Wiessler)
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