import re

xml = '''\
<Emp>
<Name>Raja</Name>
<Location>
     <city>ABC</city>
     <geocode>123</geocode>
     <state>XYZ</state> 
</Location>
<sal>100</sal>
<type>temp</type> 
</Emp>'''

locUpdate = '''\
    <Location isupdated=1>
         <city>MyCity</city>
         <geocode>10.12</geocode>
         <state>MyState</state>
    </Location>'''

output = re.sub(r"(?s)<Location>.*?</Location>", r"%s" % locUpdate, xml)

print output