If the timing belt for 98 Volvo V70 XC breaks will it damage engine?

Yes, a broken timing belt in a 1998 Volvo V70 XC will almost certainly cause significant engine damage. Unlike interference engines where pistons and valves collide directly, the Volvo's engine is an interference engine. When the timing belt breaks, the valves and pistons are no longer synchronized, leading to bent valves, damaged pistons, and potentially other internal engine damage. This will require a very expensive repair or engine replacement.