By Arshad Mohammed

BEIJING (Reuters) - President Bush on Friday argued that liberty does not bring chaos and said he prayed Beijing would end religious persecution, in a nationally televised speech that held up the U.S. system as a model for China.

In an address that alluded to his own powerful sense of religious faith, Bush urged China to expand personal and political freedoms, to tolerate diversity and dissent, and to respect the rule of law.

"Life in America shows that liberty, paired with law, is not to be feared," Bush said in a prepared text of remarks to be delivered on Friday at Beijing's Tsinghua University, one of China's top technical and engineering institutions.

"In a free society, debate is not strife. And disorder is not revolution," he added, addressing the long-standing Chinese argument that greater political and personal freedoms could bring chaos in a nation of more than one billion people.

In a strategy used by many U.S. presidents, Bush extolled the U.S. system rather than explicitly criticizing China's political system and human rights record and he suggested that many Chinese have a "misleading and harmful" view of America.

"We are a free nation, where men and women have the opportunity to achieve their dreams," Bush said on the final day of six-day visit to Japan, South Korea and China. "You can support the policies of our government, or you are free to openly disagree with them.

"Those who fear freedom sometimes argue it could lead to chaos, but it does not, because freedom means more than every man for himself," he said.

"Change is coming," he added. "China is already having secret ballot and competitive elections at the local level. Nearly 20 years ago, Deng Xiaoping said that China would eventually expand Democratic elections all the way to the national level -- and I look forward to that day."

'A NATION WITH THE SOUL OF A CHURCH'

Bush, who met President Jiang Zemin on Thursday, said he had told the Chinese leader last year of his own sense of faith and argued that religion strengthens U.S. society.

"America is a nation guided by faith," Bush said. "Someone once called us 'a nation with the soul of a church.' Ninety-five percent of Americans say they believe in God, and I'm one of them."

"Freedom of religion is not something to be feared but to be welcomed, because faith gives us a moral core and teaches us to hold ourselves to high standards, to love and serve others, and to live responsible lives," Bush said.

"For centuries this country had a tradition of religious tolerance," he added. "My prayer is that all persecution will end so that all in China are free to gather and worship as they wish."

In a rare and unscripted moment of candor during a news conference with Bush on Thursday, Jiang said he had read the Bible, the Koran and Buddhist scriptures despite being a non-believer.

The Chinese leader also brushed aside questions about why Beijing had imprisoned more than 50 Roman Catholic bishops, saying China protected such freedoms in its constitution but that those who broke the law must be punished.

"Whatever religion people believe in, they have to abide by the law. So some of the law-breakers have been detained because of their violation of law, not because of their religious beliefs," Jiang said.

"Although, I'm the President of this country, I have no right interfering in the judicial affairs because of judicial independence," the Chinese leader added.

'MISLEADING AND HARMFUL'

Bush also sought to defend the U.S. system against what he suggested were misleading stereotypes to be found both on U.S. television and in Chinese textbooks, which he said depict the United States as bullying the weak and suggest the Federal Bureau of Investigation represses working people.

"Neither of these is true -- and while the books may be leftovers from a previous era -- they are misleading and harmful," Bush said, while acknowledging that the United States had "its share of problems and faults."

Bush was to be introduced at Tsinghua by Chinese Vice President Hu Jintao, a graduate of the university and the man widely expected to succeed Jiang as China's president.

The U.S. president went out of his way to be gracious to Hu, saying, "I know how important this place is to the vice president, who earned his degree here and -- even more important -- met his gracious wife Liu Yongqing here."

After the speech, Bush was to lunch with Jiang and then pay a visit to the Great Wall of China before flying back to Washington later on Friday.