* Iraq, Syria recall ambassadors

* Iraq requests Syria hand over bomb suspects

(Adds al-Maliki statement, Syrian response, byline)

BAGHDAD, Aug 25 (Reuters) - Iraq and Syria recalled their ambassadors on Tuesday after Baghdad demanded Damascus hand over two people it says masterminded bombings in the Iraqi capital last week which killed almost 100 people.

Iraq's Shi'ite-led government has blamed supporters of Saddam Hussein's outlawed Baath party for massive truck bombs and other attacks last Wednesday, and says it has already captured some suspects it deems responsible.

In a tape aired on Sunday, one man captured said he acted under orders from a man in Syria called Sattam Farhan, a member of a wing of the Baath party headed by Mohammad Younis al-Ahmed.

"The cabinet requests (that Syria) hand over Mohammad Younis al-Ahmed and Sattam Farhan for their direct role in Wednesday's terrorist act," government spokesman Ali al-Dabbagh said.

Dabbagh said the Foreign Ministry would ask Syria to hand over all those wanted for crimes in Iraq and "to banish the terrorist organisations that use Syria as a base from which to carry out terrorist acts against the Iraqi nation".

He also said the cabinet had summoned Iraq's ambassador to Syria back to Baghdad to discuss the issue, prompting the Syrian government to recall its ambassador to Iraq in response.

Diplomats in Damascus say Syria, ruled by a rival branch of the Sunni Arab Baath party, expelled Younis earlier this year.

Syria's official news agency SANA, quoting "an official Syrian source", rebuffed Dabbagh's comments about the attacks, which Damascus has strongly condemned as a "terrorist act".

"Syria informed the Iraqi side of its readiness to receive an Iraqi delegation and discuss with it available evidence on the perpetrators of the bombings. Otherwise, it would consider what is broadcast on Iraqi media as evidence fabricated for domestic political goals," the source said.

IRAQI PM ACCUSES NEIGHBOURS

Ties between Damascus and Baghdad have been strained since around the time Saddam came to power in 1979.

Since 2003, tensions have centred around charges from the U.S.-backed Iraqi government that Syria, estranged from Washington, has permitted insurgents to stream into Iraq.

But Prime Minister Nuri al-Maliki's visit to Damascus earlier this month appeared to be another sign that bilateral relations were on the mend.

Dabbagh did not say what measures Iraq would take if the suspects were not handed over.

Iraqi officials frequently blame neighbouring countries for fomenting violence in Iraq. Despite a sharp drop in violence since the worst of the killing in 2006 and 2007, the Iraqi government is facing sharp criticism over continuing attacks.

Other Iraqis blame the recent violence on jostling among political, ethnic and sectarian groups ahead of anticipated parliamentary elections in January.

Led by Sunni Arab Saddam from 1979 to 2003, the Iraqi Baath party brutally oppressed Iraq's Shi'ites and Kurds.

On Tuesday, Maliki handed out compensation to victims of the attacks and called on neighbouring countries to place greater value on regional ties.

"We are in an open war that unfortunately is backed by neighbouring countries, and that is why what happened has happened. They want more to happen before the elections," Maliki said.

Dabbagh also said the cabinet had asked the foreign ministry to petition the United Nations Security Council to create a criminal court to try "war criminals who planned and executed war crimes and crimes against humanity" in Iraq. (Additional reporting by Khalid al-Ansary in Baghdad and Nadim Ladki in Beirut) (Editing by Missy Ryan and Louise Ireland)