(Adds LG Uplus share drop in paragraph 3, S. Korean statement in paragraph 9)

SEOUL, May 23 (Reuters) - The U.S. government is lobbying South Korea not to use Huawei Technologies Co Ltd products, a South Korean newspaper reported on Thursday, amid a wider push by Washington to get its allies to reject the Chinese tech firm's goods.

In one incident, a U.S. State Department official said in a recent meeting with a South Korean counterpart that local telco LG Uplus Corp, which uses Huawei's equipment, should "not be allowed to serve in sensitive areas in South Korea", Chosun Ilbo reported. The official added Huawei needs be eventually driven out of the country, if not immediately.

LG Uplus shares dropped 6 percent in Thursday's morning trade, which compared to a 0.4 percent drop in the benchmark KOSPI.

"LG Uplus has not received any statements or requests from either South Korea’s foreign ministry or the United States regarding our use of Huawei equipment," a LG Uplus official told Reuters on Thursday.

Washington has been pressing its allies not to use equipment made by Huawei over concerns it could be used for espionage or cyberattacks, a concern that Huawei says is unfounded.

The anti-Huawei campaign intensified last week, when U.S. President Donald Trump signed an executive order that effectively banned the use of Huawei equipment in U.S. telecom networks on national security grounds. Additionally, the Commerce Department put limits on the firm’s purchases of U.S. technology.

While South Korea is a U.S. ally, China is its biggest export market. China took in nearly a quarter of South Korea's total exports in the first four months of this year, according to South Korea government data.

The U.S. government has repeatedly sent the message to South Korea's Foreign Ministry through various diplomatic channels that using Huawei products could cause security problems, Chosun Ilbo reported, citing an unnamed diplomatic source in Seoul.

"The U.S. has stressed the importance of security for 5G equipment, and we are aware of the U.S.'s position," South Korea's Foreign Ministry said in a statement, adding that Seoul and Washington have been in continued talks on this issue, but declining to elaborate.

The U.S. Embassy in Seoul did not immediately respond to request for comment. (Reporting by Joyce Lee and Heekyong Yang; Additional reporting by Choonsik Yoo; Editing by Sam Holmes)