(Updates with confirmation of house arrest)

By Erik Lopez

SANTIAGO, June 8 (Reuters) - Former Peruvian President Alberto Fujimori was placed under house arrest near the Chilean capital Santiago on Friday after Peru said it feared he might try to flee Chile to avoid extradition.

Fujimori, charged by Peru with corruption and human rights abuse dating from his 1990-2000 rule, was confined to a house in the suburb of Chicureo on the outskirts of the city, according to sources close to him.

A Chilean Supreme Court judge ordered the detention in response to a request from Peru made through its embassy in Santiago on Friday morning.

"This measure is designed to stop (Fujimori) fleeing," the court said in a statement.

Fujimori has been detained in Chile since late 2005, awaiting the outcome of his extradition case. Until Friday, under the terms of his bail, his day-to-day movements were not restricted.

Peruvian government lawyers trying to extradite him have said they fear he might try to leave Chile, possibly by seeking refuge in the Japanese embassy in Santiago.

Those fears were fueled on Thursday when a Chilean state prosecutor submitted a report to the Supreme Court recommending his extradition.

Although the report is nonbinding, it was viewed as evidence the net might be closing in on Fujimori, accused by Peru of embezzling $15 million, paying bribes and ordering killings and kidnappings during his 10-year rule.

Fujimori denies all the charges against him and said late on Thursday he had no intention of fleeing Chile.

"I'm leading a totally normal life, following instructions from my lawyers and friends," he told Chilean media. "I've never thought about escaping."

His lawyer Francisco Velozo told reporters the former president had taken news of his house arrest in his stride.

"He reacted as he always has during this case -- with calm while he awaits a decision from Orlando Alvarez," Velozo said.

Fujimori's extradition case now rests with Supreme Court judge Alvarez, who must decide whether Fujimori should be sent to Peru. Alvarez's ruling, expected within weeks, can be appealed by the defense or the prosecution.

Fujimori, 68, was arrested in Chile in November 2005 when he arrived unexpectedly from Japan, apparently to try to launch a political comeback in Peru.

He had sought exile in Japan, the country of his parents' birth, after his government collapsed under the weight of a huge corruption scandal.

The former president was popular in Peru in the 1990s for cracking down on the Shining Path Maoist guerrilla movement and successfully ending a four-month siege at the Japanese ambassador's residence in Lima.

But he was also criticized as autocratic, particularly after he dissolved the Peruvian Congress in 1992. (Additional reporting by Rodrigo Martinez and Manuel Farias)

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