Speaking at an Asian security conference in Singapore, the Pentagon chief urged Thailand's military to free scores of people detained under martial law since generals seized power from the civilian government on May 22.
Shortly after making his comments, Thai authorities arrested one anti-coup protester in downtown Bangkok as they braced for a larger protest threatened for Sunday.
Hagel called on the junta to end its curbs on "free expression" - which include banning political gatherings of more than five people and sweeping media controls - and for the army to "immediately restore power to the people of Thailand" through elections.
Condemning the kingdom's "retreat from democracy" Hagel said the US had suspended its long-standing military ties with Thailand.
Australia's Foreign Minister also said Canberra had reduced its "engagement" with the Thai military.
Junta chief Prayut Chan-O-Cha late Friday gave a rough timetable for a return to democracy, offering polls once a reconciliation drive across the bitterly split nation and a year-long reform period are complete.
"Stage three is a general election under an absolute democratic system that is acceptable to all sides," he said in his first televised address to the nation.
But he warned his roadmap will probably fail "if there are still protests or people do not co-operate".
Since taking power, authorities have overridden the constitution, curtailed civil liberties under martial law and imposed a nightly curfew.


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