* Rebel group gives even higher death toll
* Syrian authorities dismiss report as untrue
* Western powers call for U.N. investigators to visit scene (Updates with higher death toll, Syrian army denial)
By Dominic Evans and Khaled Yacoub Oweis
BEIRUT/AMMAN, Aug 21 (Reuters) - Syrian activists accused President Bashar al-Assad's forces of launching a gas attack that killed nearly 500 people on Wednesday, in what would, if confirmed, be by far the worst reported use of chemical arms in the two-year-old civil war.
An opposition monitoring group, citing figures compiled from medical clinics in the Damascus suburbs, put the death toll at 494 - 90 percent of them killed by gas, the rest by bombing and conventional arms.
The rebel Syrian National Coalition said 650 people had been killed. Other rebel groups cited even higher figures.
Images, including some taken by freelance photographers and supplied to Reuters, showed scores of bodies including of small children, laid out on the floor of a clinic with no visible signs of injuries. Reuters was not independently able to verify the cause of their death.
The Syrian armed forces strongly denied using chemical weapons. Syrian state television said the accusations were fabricated to distract a team of U.N. chemical weapons experts which arrived three days ago.
Western countries called urgently for the inspectors to be dispatched to the scene to investigate what would be the deadliest single incident of the Syrian war. If confirmed, it would also be the worst known use of chemical weapons since Iraqi leader Saddam Hussein gassed thousands of Kurds in the town of Halabja in 1988.
Activists said rockets with chemical agents hit the Damascus suburbs of Ain Tarma, Zamalka and Jobar during fierce pre-dawn bombardment by government forces.
The Damascus Media Office monitoring centre said 150 bodies were counted in Hammouriya, 100 in Kfar Batna, 67 in Saqba, 61 in Douma, 76 in Mouadamiya and 40 in Irbib, all suburbs of Damascus.
A nurse at Douma Emergency Collection facility, Bayan Baker, earlier told Reuters the death toll collated from medical centres was at least 213.
"Many of the casualties are women and children. They arrived with their pupils dilated, cold limbs and foam in their mouths. The doctors say these are typical symptoms of nerve gas victims," the nurse said. Exposure to sarin gas causes pupils in the eyes to shrink to pinpoint sizes and foaming at the lips.
The U.N. team is in Syria investigating allegations that both rebels and army forces used chemical weapons in the past, one of the main disputes in international diplomacy over Syria.
The Swedish scientist leading the team, Ake Sellstrom, said the reports should be looked into, but doing so would require a request from a U.N. member state.
France said the mission must be sent to the site to "investigate immediately". Turkey made a similar call. Britain said it was deeply concerned and would raise the issue at the U.N. Security Council, adding the attacks would be "a shocking escalation" if confirmed.
Extensive amateur video and photographs appeared on the Internet. A video purportedly shot in the Kafr Batna neighbourhood showed a room filled with more than 90 bodies, many of them children and a few women and elderly men. Most of the bodies appeared ashen or pale but with no visible injuries. About a dozen were wrapped in blankets.
Other footage showed doctors treating people in makeshift clinics. One video showed the bodies of a dozen people lying on the floor of a clinic, with no visible wounds. The narrator in the video said they were all members of a single family. In a corridor outside lay another five bodies.
A Syrian military officer appeared on state television and said the allegations were untrue, and a sign of "hysteria and floundering" by Assad's opponents. Information Minister Omran Zoabi said the allegations were "illogical and fabricated".
The head of the opposition Syrian National Coalition said Assad's forces had carried out a massacre: "This is a chance for the (U.N. inspectors) to see with their own eyes this massacre and know that this regime is a criminal one," Ahmed Jarba said.
(Additional reporting by Erika Solomon in Beirut and Anthony Deutsch in Amsterdam, Niklas Pollard in Stockholm; Editing by Peter Graff)