* City seen as bastion of loyalty to Assad before uprising
* Businessmen hit by attacks, kidnapping, extortion
* Rebel groups, government-linked gangs blamed
* Political splits emerge within business community
* Industrial zones operating at 5-10 percent of capacity
AMMAN, Oct 24 (Reuters) - Top Syrian businessman Fares Shehabi says he lives in constant fear of being kidnapped by rebels fighting loyalist forces for control of his home city Aleppo. But he clings on in the city, saying it is his duty to try to keep its economy running.
``I was attacked three or four times and they tried to kidnap me many times,'' said Shehabi, 40, scion of a wealthy merchant family with interests ranging from pharmaceuticals and food to real estate and banking.
In one attack, assailants riddled one of his factories with gunfire and tried to plant explosives in it, he said. He now moves around with bodyguards, sometimes in disguise.
Nineteen months into the uprising against President Bashar al-Assad, Syria's biggest city and main industrial centre has been crippled by the fighting. Located among the olive groves and pistachio trees of northwest Syria, it has a population of about 3 million in peacetime.
In addition to widespread damage to factories and shops and an exodus of refugees from neighbourhoods caught in the fighting, Aleppo's community of businessmen and industrialists has been hit hard. Some of the wealthiest are linked to Assad's government through partnerships with officials.
Many have fled with their families to places such as Lebanon, Dubai and Egypt. Others have stayed, but say they are targets of violence, extortion and kidnapping attempts by rebel groups and government-linked gangs known as shabiha.
The businessmen developed Aleppo into Syria's economic engine, the focus of its export trade and the seat of its pharmaceutical, textile and plastics industries. So the damage to the merchant class bodes ill for a recovery of the Syrian economy when the fighting eventually ends.
Armed groups in Aleppo are ``attacking every businessman, small or big, whether he has a factory or a workshop, if he does not want to meet their demands and buy them weapons,'' Shehabi said by telephone from the city.
Aleppo's business community dates back many centuries, to when the city was a trading centre on the Silk Road between East and West. In recent years it has been seen as a bastion of loyalty to Assad's rule; some of its members were accused of financing loyalist thugs who attacked demonstrators in the early days of the uprising.
Heading the city's chamber of industry, Shehabi worked closely with the government to develop its manufacturing base, which he estimates accounts for almost half of Syria's industrial capacity. Before a rebel offensive in the city began in July, Aleppo was a major source of revenue for Assad.
Shehabi is one of four top Syrian businessmen who were slapped with European Union sanctions last year for providing economic support to the Syrian regime. He said some of his assets abroad were frozen, and that he was contesting the penalty through a law firm in Belgium.
``It violated my rights and they did not hear my side of the story. I challenge them to provide a single proof that I financially backed any side,'' he said.
Although he blames the rebels for most of the damage to the city, Shehabi is now also critical of authorities' handling of the crisis, saying the government has been slow to promote political reforms and to fight organised crime.
``Aleppo is being punished by the revolution and now neglected by the state,'' he said.
At least 100 businessmen have been kidnapped since the start of the conflict, the chamber of industry estimates. Scores of factories have been set ablaze after their owners refused to pay extortion demands, according to several local businessmen who requested anonymity out of concern for their personal safety.
Many industrialists now pay protection money to gangs, with monthly fees ranging from $4,000 to $5,000 plus a downpayment that can go up to $100,000 depending on the size of the factory, businessmen said.
When two fires last December gutted the German-equipped textile plants of the Olabi family, known for their close ties to the authorities, it was clear that much of the violence was becoming politically motivated, the businessmen said.
Panic began to set into the business community in the weeks before the July rebel offensive, when the body of ice cream factory owner Ibn Nayef was found. He had refused to heed a call by rebel groups for a general strike.
The most publicised attacks were against the prominent Alweis business family, which lost two of its members in what appeared to be revenge killings for failing to pay protection money. A third member, Jihad Alweis, owner of big milk production plants in the city, escaped an attempt on his life and has since fled the country, Aleppo businessmen said.
The general manager of Aleppo Cables Co, Mohammad Mustapha Jweid, was kidnapped from his home by a gang a month ago; he was beaten up and released three days later.
Among the most prominent recent kidnappings has been that of businessman Mohammed Maher al-Malah, released after a 5 million Syrian pound (about $80,000) ransom was paid, businessmen said.
Aleppo's industrialists say much of the violence has its roots in Syria's rural-urban divide, and the envy and antagonism which poor rebels from the countryside feel for wealthy businessmen in the city.
Some of the owners of Aleppo's textile factories have moved to Egypt, which has a major textile industry, and become involved in the business there in order to preserve their links to export markets in Europe that have been built over decades.
Shehabi said that on a recent visit to Egypt, he met Syrian businessmen who would come back to Aleppo as soon as security conditions permitted.
But the hatreds created by the uprising may prevent a return to business as usual even when the fighting stops. Aleppo's merchant community is increasingly polarised between those who intend to stick with the regime until the end and those who clandestinely sympathise with or even support the rebels.
Commerce and trust between these camps may not resume under any circumstances. Yusef Abdul Wahed, an Aleppo plastics manufacturer who has now left the country, said he felt little sympathy for industrialists who used their political connections to make unfair profits before the war.
``They benefited in previous years and when the crisis happened, they were asked to pay the salaries of the shabiha,'' he said.
In any case, the damage to the city's manufacturing facilities and infrastructure will take years to repair. Shehabi estimated Aleppo's industrial zones were now operating at only 5 to 10 percent of capacity.
Shelling and close-quarters combat have destroyed hundreds of factories and shops, filling streets with rubble. The state-of-the-art Sheikh Najjar industrial zone to the east of the city, which attracted hundreds of millions of dollars of investment, is now little more than a ghost town where guards try to protect some factories at great risk to their lives.
``What is happening is the wholesale destruction of Syria's infrastructure. The stoppage of industry is a big catastrophe - for over two months there has been total stoppage,'' said Fouad Jumaa, a leading furniture maker in Aleppo.
``We are bracing ourselves for a long period of disruption. This is destruction in every sense.''