WRAPUP 5-Assad's brother may have lost leg in bombing -sources
* Assad's brother severely wounded in bomb attack -Western, Gulf sources
* Five Gulf states tell citizens to quit Lebanon
* Retaliatory kidnappings raise sectarian spectre over region
* U.N. says 2.5 million Syrians need aid
BEIRUT, Aug 16 (Reuters) - President Bashar al-Assad's feared brother Maher lost a leg in a bomb attack on the Syrian leader's security cabinet a month ago, Western and Gulf sources said on Thursday.
While a Lebanese politician with ties to the Assads questioned their assertion that Maher al-Assad had been badly wounded, it would be a heavy blow to one of the main military commanders fighting the 17-month-old insurgency.
The attack on a meeting of security chiefs in Damascus on July 18 was confirmed to have killed four members of the president's inner circle, including a brother-in-law. It also emboldened the rebels to take their fight to the capital.
Though never a very visible member of the president's entourage, Maher Assad has not been seen in public since the bombing. His brother has restricted presidential appearances to recorded broadcasts, leading to speculation about the effectiveness of the Syrian leadership as the rebellion grows.
Maher has acquired a fearsome reputation as the commander of the Syrian army's Republican Guard and 4th Division, elite formations largely composed of troops from the Assads' minority Alawite sect, whose loyalty can be relied on by the leadership.
"We heard that he lost one of his legs during the explosion, but don't know any more," a Western diplomat told Reuters. A Gulf source said: "He lost one of his legs. The news is true."
However, a Lebanese politician with close ties to Damascus said he doubted whether Maher had indeed been wounded in the attack. He said a colleague had spoken to Maher by telephone on the day after the bombing, July 19, and the Syrian commander gave no hint to him that he had just sustained a serious injury.
On Thursday, Foreign Minister Walid al-Moualem told state television the government was confident: "Anyone who imagines the possibility of victory over the Syrian army is delusional," he said, adding that rebels in the city of Aleppo had yet to be crushed because troops were taking care not to harm civilians.
Western powers and the Gulf Arab states have rallied behind the rebellion against Assad's Iranian-backed government and the talk of Maher's possible injury came as fears grew that the conflict, which has already claimed the lives of at least 18,000 people in Syria, was starting to spill over its borders into a region already torn by sectarian divisions.
Gulf Arab states told their citizens to leave Lebanon after a Lebanese Shi'ite clan kidnapped more than 20 people in Beirut and initially threatened to seize more Arab nationals.
The gunmen said a Turkish hostage, whose country is a key backer of Syria's mainly Sunni Muslim insurgency, would be the first to die if one of their kinsmen held by Syrian rebels in Damascus were killed.
The powerful Meqdad family is seeking to put pressure on rebels to release clan member Hassan al-Meqdad, who has been held by the Free Syrian Army (FSA) for two days.
An earlier threat by the kidnappers to seize Saudis, Turks and Qataris to secure the release of their kinsman bore ominous echoes of Lebanon's own civil war - and Arab governments lost no time in urging visitors to leave Beirut's popular summer tourist haunts.
Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Bahrain all told their nationals to leave at once. Some nations have already begun flying their citizens home.
"The snowball will grow," warned Hatem al-Meqdad, a senior member of the Meqdad family who said his brother Hassan was detained by the FSA two days ago.
Assad, whose Alawite minority is an offshoot of Shi'ite Islam, has long relied on support from Shi'ite Iran and its Hezbollah allies.
He accuses the Sunni powers of the Gulf and Turkey of promoting the revolt against him, which grew out of Arab Spring demonstrations 18 months ago.
While his opponents, and the Western powers which sympathise with them, insist they want to avoid the kind of sectarian blood-letting seen in Iraq, rebels who mostly come from Syria's disadvantaged Sunni majority have seized Iranians and Lebanese there in recent weeks, saying they may be working for Assad.
The kidnapping by the Meqdad clan on Wednesday will damage a Lebanese economy for which Gulf tourists have played a part in recovery after 15 years of civil war ended in 1990.
Maher al-Meqdad, the clan's spokesman, said they were only targeting the Free Syrian Army and Turks, insisting that Saudis, Qataris and other Gulf nationals were not targets.
"If Hassan (al-Meqdad) is killed, the first hostage we will kill is the Turk," he told Reuters. He later said the clan had "halted military operations", signalling it would stage no further abductions.
The Turkish hostage told a Lebanese television channel he was being treated well. Another station broadcast footage it said showed two Syrian hostages in the custody of masked gunmen from the Meqdad clan wearing fatigues and armed with rifles.
Lebanese Prime Minister Najib Mikati condemned the kidnappings, but his government seemed largely powerless to act.
"This brings us back to the days of the painful war, a page that Lebanese citizens have been trying to turn," he said.
Fighting in Syria has triggered violence across the border before - some of it linked to Syrian rebels bringing arms and supplies across Lebanon.
But the round of hostage-taking on both sides adds a new factor for regional states, who are advancing their strategic interests while Russia and the West are deadlocked by their deep divisions over Syria.
At a meeting in Saudi Arabia, the Organisation of Islamic Cooperation suspended Syria on Thursday, citing Assad's suppression of the Syrian revolt, but there was little support for direct military involvement.
The 57-member body's rebuke is mostly symbolic, but it shows Syria's isolation - as well as that of its ally Iran - across much of the Sunni-majority Islamic world.
China used a visit to Beijing by a special envoy from Assad to repeat its call for the Syrian government to talk with the opposition and take steps to meet the people's demand for change, but offered no new solutions.
Talks seem unlikely in the near future while the rebels insist Assad must step down as a precondition for negotiations and government troops are pounding rebel forces - though word at the United Nations in New York that a new international mediator it to be named will revive the focus on what he can achieve.
On a day that officials said the beleaguered U.N. observer mission in Syria would finally end in days, weeks after mediator Kofi Annan quit in despair of giving them any peace to monitor, U.N. sources told Reuters that veteran Algerian diplomat Lakhdar Brahimi had agreed to try and broker a solution.
In the meantime, the price being paid by the Syrian people was underlined by the U.N. humanitarian chief, Valerie Amos, who said that as many of 2.5 million people, about one tenth of the population, were in need of aid.