FACTBOX-Yemen caught in web of challenges

(Reuters) - Yemen, at the southern tip of the Arabian peninsula, is the Middle East's poorest country, with a fast-growing population and dwindling oil and water resources.

Here are some facts about Yemen and the challenges it faces:

- The Republic of Yemen was formed when the traditionalist north merged with the Marxist-ruled south in 1990. President Ali Abdullah Saleh crushed a secession attempt by the south in 1994.

- Saleh, 65, has ruled for nearly 30 years since taking power as an army officer in the former north Yemen in 1978. He was elected to another 7-year term in September 2006.

- The population of 22.4 million is growing more than 3 pct a year. Estimated real GDP growth was 2.8 pct in 2007. Life expectancy at birth is 62.5 years. About 45 pct of Yemenis live on less than $2 a day and half are illiterate. Groundwater is being depleted faster than it can be replenished.

- Oil production, the mainstay of the economy, is expected to decline to 300,000 barrels per day this year from 320,000 in 2007. A big gas project is due to come onstream in late 2008.

- Yemen is troubled by a four-year-old revolt by Zaidi Shi'ite tribesmen in the north and widespread discontent in the once-independent south. Allied to Washington in its "war on terror", the Sanaa government is also combating al Qaeda militants who have attacked Western and local targets.