The National Supreme Council for Human Rights (NSCHR), appointed by the government last year and subsidised by it, corroborated widespread allegations that government security forces engage in widespread torture of detainees.
In its first annual report, the NSCHR called for a "rapid end to the state of emergency" to permit participation in the constitutional referendum, the presidential election and parliamentary elections "in a neutral and secure atmosphere within the framework of common law".
President Husni Mubarak recently called for a constitutional amendment to allow for a direct presidential election. The country is to elect a new president in September and a new parliament later in the year.
Government sources have already hinted that the state of emergency, imposed after the 1981 assassination of Mubarak's predecessor, Anwar Sadat, could be lifted for the elections.
The law gives the president sweeping military powers and prohibits the holding of demonstrations outside of university campuses.
"Egypt and the Arab world are going through a very delicate phase in security matters because of the propagation of violence and terrorism, but these phenomena should be combatted within the framework of common law," said the report.
The report also called for a revision of the penal code to conform with the international convention banning torture, signed by Egypt in 1986.
Independent human rights groups have long claimed that security forces and prison officials engage in torture, hanging people by their arms or legs, beating them or using electrical shocks.
The report gave credence to such claims, citing nine cases of people being submitted to "presumed practices of torture... during interrogation".
It also highlighted the death of a detained member of the outlawed but generally tolerated Muslim Brotherhood due to inadequate health care.
The NSCHR, which has sent its report to Mubarak and to the heads of both chambers of the National Assembly, also called for the release of prisoners who have completed their sentences.
The emergency law gives the interior ministry the discretion to keep people in jail beyond their sentences if they are deemed a "danger to public security".
Among these are two brothers jailed in connection with Sadat's assassination.
The report also criticised the increasing practice of preventive detention, under which people are held with charges.
Human rights groups say 2400 people are being held under such circumstances.