Basic auth not working with rewrite

I need to protect one directory with the basic auth and rewrite all urls inside this directory only.

I have the following config:

location /admin/ {
auth_basic "Secure area";
auth_basic_user_file .htpasswd;
rewrite ^(.*)$ /admin/index.php last;
}

However, basic auth not working. If I comment rewrite rule it starts working.

How to fix it?