You are right, when dealing with generic interfaces and WCF the generic interface will have to be exposed with a concrete type so each TEntity you support will have to have a separate service. Another approach is to use a base class with inheritance
and using KnownType or ServiceKnownType.
For more flexibility you can avoid putting the validation attributes on the service interface but instead put them on the concrete objects that will be passed in. E.g.:
public class ExternalUser : BusinessEntityBase<ExternalUser>
public string Name
Each TEntity/Service (in the posted model it's a 1:1 relationship) could have it's own rules.
If you are using configuration to store the validation rules then inheritance is not supported well (rules need to be duplicated from base class to derived class).
Enterprise Library support engineer