RIYADH (Reuters) - A leading Saudi hospital said on Monday its lawsuit against international tobacco firms had been filed in US courts. The hospital seeks at least $3 billion in compensation for treating lung disease in smokers.

The official Saudi news agency SPA quoted Anwar al-Jabarti, executive general manager at King Faisal Specialist Hospital and Research Centre in Riyadh, as saying the state hospital was seeking at least 10 billion riyals ($2.67 billion) in compensation from the tobacco firms and their local agents. ``One of the American tobacco firms was negotiating (with the hospital) to settle the case,'' Jabarti said. ``But I refused to settle outside court and insisted on going on with the suit, which was recently accepted in US courts, through the hospital representative in this case,'' Jabarti said. Jabarti said the hospital was filing a new suit against plants manufacturing tobacco products smoked in water pipes--popular in Arab countries--and their agents in the kingdom. Saudi is the largest tobacco market in the Gulf Arab region. Tobacco giants admitted at UN hearings on an anti-smoking treaty in Geneva last year that cigarettes were deadly and addictive, but defended their right to sell and advertise them freely. After denying health risks associated with smoking for many years, beleaguered tobacco companies have been stung into action by US lawsuits from injured smokers, class-action cases and government-backed suits by dozens of states seeking to win back taxpayer money spent caring for sick and dying smokers. Gulf Arab states have raised customs duties on tobacco from 30% in the 1980s to 100% in 2000 to curb tobacco consumption and boost revenues. In 1998, the six Gulf Arab states imported 25 billion cigarettes worth some $500 million. Saudi Arabia, with a population of some 18 million, imported 15 billion cigarettes. ($1-3.75 riyals).

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