BNP suspends Fortis deal after legal challenge

* BNP Paribas says its part of Fortis deal cannot proceed

* Belgium remains committed to Fortis carve-up plan

* BNP says it too is still keen on Fortis

* BNP Paribas shares drop 7 pct

* Analysts predict BNP rights issue

(Updates with latest BNP Paribas comment)

By Antonia van de Velde and Sudip Kar-Gupta

BRUSSELS/PARIS (Reuters) - The rescue of stricken bank Fortis ran into more trouble on Thursday when French bank BNP Paribas (BNPP.PA) said it was suspending a key part of the deal due to a legal challenge over the transaction.

The news came after BNP, France's biggest bank, revealed 710 million euros ($1 billion) of losses at its investment banking unit earlier this week and said it may cut 700 jobs.