wordpress from folder

Am trying to run wordpress from a folder in my local system. On the server its running from the root. Have downloaded the files. restored the db and then changed the home and siteurl through db update query. It has an htacccess file. Changed it like below.

<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /wordpress/
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /wordpress/index.php [L]
</IfModule>

But i am not able to access it says page not found. If i append index.php to the end of the url it works fine. When i try pointing to the menu urls it does not have the wordpress subfolder to the urls.

Please help.