* Court says Poland violated rules on torture, detention
* Orders Poland to pay damages to two Guantanamo inmates
* Polish official deny they hosted a CIA "black site"
* Poland says ruling an embarrassment, harms its image (Updates with foreign ministry in paragraph 15)
By Christian Lowe
WARSAW, July 24 (Reuters) - The CIA ran a secret jail on Polish soil, the European Court of Human Rights ruled on Thursday, piling pressure on Poland, one of Washington's closest allies, to break its long silence about the global programme for detaining al Qaeda suspects.
The court said it had been established that the CIA used a facility in a northern Polish forest, code named "Quartz", as a hub in its network for interrogating suspected al Qaeda operatives rounded up after the Sept. 11, 2001 attacks.
Poland has always denied that the CIA had a jail on its territory, even as leaks from former U.S. intelligence officials, and a Senate investigation, brought more and more details of the programme into the open.
Thursday's ruling was the first time that a court in Europe had said that the CIA operated one of the secret jails - often referred to as "black sites" -on the continent.
Amrit Singh, a lawyer with the Open Society Justice Initiative who acted for one of the men who brought the case, told Reuters both Poland and the United States would have to take note of what she called an historic ruling.
"It's time for them to own up to the truth," she said.
The court case was brought by lawyers for two men, Saudi-born Abu Zubaydah, and Saudi national Abd al-Rahim al-Nashiri, who are now both inmates at Guantanamo Bay, the U.S. military's prison on Cuba.
They alleged they were flown in secret to a remote Polish airfield, then transferred to the CIA-facility near the village of Stare Kiejkuty where they were subject to treatment they said amounted to torture.
Lawyers for Nashiri said one on occasion he was forced to stand naked and hooded in his cell while his interrogator operated a power drill, making the detainee believe he would be harmed. In another incident, the lawyers said, an interrogator cocked a pistol next to Nashiri's head.
The court ruled that, despite the wall of secrecy around the U.S.-led "extraordinary rendition" programme, there was enough circumstantial evidence to say beyond reasonable doubt that both men were held at a CIA-run facility in Poland.
It said Poland knew about their detention and should have known they were at risk of ill-treatment.
The court found Poland violated its obligations under the European Convention on Human Rights to prevent torture, ensure the right to liberty, and properly investigate allegations a crime had been committed on its territory.
It ordered Poland to pay al-Nashiri 100,000 euros in damages and 130,000 euros to Zubaydah.
"The ruling of the tribunal in Strasbourg on CIA jails is embarrassing for Poland and is a burden both in terms of our country's finances as well as its image," said Joanna Trzaska-Wieczorek, a spokeswoman for the Polish president.
Poland's foreign ministry said a decision had not yet been taken about an appeal. Ministry spokesman Marcin Wojciechowski said the court ruling was premature because Polish prosecutors were investigating the allegations about the CIA jail. That investigation has been running since March 2008.
The ruling from Strasbourg may have implications for other European states alleged to have hosted CIA prisons: similar cases have been lodged with the court in Strasbourg against Romania and Lithuania.
The court ruling did not directly cover the United States, which is outside its jurisdiction.
The administration of former U.S. President George W. Bush began the "extraordinary rendition" programme to deal with suspected al Qaeda operatives, many of them captured in the U.S.-led invasion of Afghanistan.
Keeping the detainees on foreign soil meant they were not entitled to the protection afforded under U.S. law. The Bush administration said that was important because it gave it more scope to interrogate the suspects and extract information which helped avert violent attacks by militants.
The U.S. government says Abu Zubaydah ran a camp in Afghanistan that trained some of those who carried out the Sept. 11 attacks on U.S. cities. It accuses al-Nashiri of directing an attack on the U.S. warship Cole in the Yemeni port of Aden in 2000 that killed 17 sailors.
President Barack Obama signed an order ending the use of the CIA jails after taking office in 2009. Obama's administration has however declined to launch an investigation and has not prosecuted any U.S. officials for their role in the programme.
The U.S. Senate Select Committee on Intelligence is preparing to publish parts of a previously-classified report on the rendition programme which the committee chair has said uncovered shocking brutality against detainees.
Crofton Black, a researcher on the rendition programme with campaign group Reprieve, said if the report details Poland's involvement in the programme, that will make Warsaw's denials about a jail on its soil even harder to sustain.
"It highlights the absurdity of the situation they have got themselves into," said Black. (Additional reporting by Marcin Goettig and Wiktor Szary; Editing by Jeremy Gaunt)