Musharraf, who seized power in a 1999 coup and has been a close ally of the United States since the Sept. 11, 2001, attacks, has struggled to contain spreading Islamic militancy that has centered along the Afghan border and spread to the capital and beyond. Hundreds have died in recent weeks.
Pakistanis have increasingly turned against the government of Musharraf, who failed earlier this year to oust Iftikhar Mohammed Chaudhry — the chief justice replaced Saturday.
Rice said that to her knowledge, U.S. officials had yet to hear directly from Musharraf after his declaration.
"Whatever happens we will be urging a quick return to civilian rule" Rice told reporters traveling with her in Turkey, and a "return to constitutional order and the commitment to free and fair elections."
Crucial parliamentary elections meant to restore civilian rule are due by January. Musharraf himself was overwhelmingly re-elected last month by the current parliament, dominated by his ruling party, but the vote was challenged. The Supreme Court has emerged this year as the main check on Musharraf's dominance and is due to issue a verdict before his current term expires Nov. 15.
Most analysts thought Musharraf was on shaky legal ground in his re-election by lawmakers last month — a vote that was boycotted by most of the opposition — but they still expected the court to rule in his favor to prevent further destabilizing Pakistan.
However in recent days some judges had made comments that they would not be swayed by threats from senior officials that an emergency might be declared if the court ruled against the general.
The seven Supreme Court judges rejected the declaration of emergency and ordered top officials, including the prime minister, and military officers not to comply with it. The two-page ruling said there were no grounds for an emergency
At least seven trucks brought armed police and paramilitary ranger troops to Constitution Avenue that passes in front of the court, Parliament and the official residences of the president and prime minister.
Paramilitary troops behind rolled barbed wire blocked access to an official compound housing lawmakers — barring even wives, children and even a ruling party senator from entering.
Bhutto, seen by many supporters as key to a possible return to democracy, went to Dubai after being targetted by assassins in Pakistan last month. Suicide bombers attacked her homecoming parade after eight years in exile, killing more than 140 people.
Musharraf's order allows courts to function but suspends some fundamental rights guaranteed by the constitution, including freedom of speech. It also allows authorities to detain people without informing them of the charges.
In Karachi, about 100 police and paramilitary troops surrounded Bhutto's house and a bomb disposal squad searched the building, witnesses said.
There were reports of gunfire in several districts of the city, but it appeared to be aerial firing, police said.
The emergency was expected to be followed by arrests of lawyers and other perceived opponents of the government, including civil society activists and possibly even members of the judiciary itself, a ruling party lawmaker said on condition of anonymity because of the sensitivity of the issue.
Private Geo TV reported the arrest of the president of the Supreme Court Bar Association, Aitzaz Ahsan — a lawyer for Chaudhry in the case that led to his reinstatement in July.
With telephone lines cut, it was not possible to contact government spokesmen for confirmation.
Nawaz Sharif, a former prime minister who was deported in September as he tried to return from exile, condemned the emergency and said Musharraf should resign. He also urged the people of Pakistan to rise against Musharraf.
"If you don't do it today, it will too late then," he told Geo TV from Saudi Arabia.