How do I embed a URL in a block which is displayed as the linked image on the site?
For any source or path of any thing in drupal site use src like this. It will work everywhere.
<?php $src = base_path() .'sites/files/logo.png'; ?>
This src use like
<img alt="logo" src=" <?php echo $src ; ?>">
Enable PHP filter module that come with core module.
and in Block Body Choose Text format as PHP CODE.
I assuming block is created using Block module(Block UI)
I found the answer - rather easy really.... the module Image Block solves the whole problem for those of you who might see this post asking yourself the same question!
EDIT The module simply creates an image block as said - it adds a "Add image block" to the block admin page. On the page you can choose to upload a picture - so you simply have to download the image from the URL and upload it in the block. Hence it does not exactly solve the problem but this is a workaround.