With the proliferation of Web technologies, the need to deliver services via the Web has increased tremendously. More and more, customers now demand one-stop service that calls for multiple services crossing organizational boundaries, which are required to be carefully and dynamically composed in a customized manner. Such a composition should not only select the most appropriate available service, but should also adhere to the policies and regulations governing the organizational services. In this paper, we demonstrate how such a composition can be accomplished to form a coherent service flow by using rules and services expressed as a knowledge base and topic ontology. The description of rules with topic concepts allows the system to easily identify the relevant rules in a certain domain and to identify and select appropriate Web services for composition. We consider different types of compositional rules including syntactic, semantic and pragmatic (contextual), which play a major role in the discovery and selection of Web services. We model the knowledge of rules and of the topic ontology using OWL, DAML-S, RuleML and RDF standards.