apache basic auth : only for remote connections

Hi

I have been trying to restrict access to my webserver (Apache 1.3) on
WinXP.

What I want to do is:

1. Allow all connections from localhost(127.0.0.1), without prompting
for username or password.
2. Restrict access from remote machines (using basic auth)

I can set up the server to do either 1 or 2, but not both. Is it
possible? If so how should I be doing it?

This is what I am doing in my httpd.conf right now,

<Directory "C:/www/blah">
Options -Indexes
AllowOverride None

Allow from 127.0.0.1

Authtype basic
AuthName "By Request Only"
AuthUserFile "pwd.txt"
Require user joeUser

</Directory>

thanks
Hema