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Jan 4 A foiled attack on a U.S. airliner has crystallised global fears about al Qaeda in Yemen, an Arab state verging on collapse in a region that includes oil giant Saudi Arabia and one of the world's busiest shipping lanes.
The Nigerian accused of attempting the Dec. 25 airliner bombing is thought to have been on a mission organised by al Qaeda in the Arabian Peninsula (AQAP), which is exploiting instability in Yemen to launch attacks in the region and beyond.
Islamist militancy is only one of myriad economic and security challenges facing President Ali Abdullah Saleh.
A Shi'ite revolt in the north and southern secessionism are other symptoms of central government weakness in a country where rampant corruption and declining oil income undermine any effort to tackle poverty, unemployment and failing water resources.
Here are some questions and answers about how outside powers are dealing with Yemen:
WHAT IS U.S. POLICY TOWARD YEMEN?
Saleh pledged cooperation with the United States after the Sept. 11, 2001, attacks on U.S. cities and received military and economic aid in return. But by 2004 al Qaeda appeared to be in disarray and U.S. interest waned. In 2006 Washington slashed aid to mark its wrath at Yemen's perceived lenience towards militants.
The pendulum has swung back. U.S. counter-terrorism officials now rank Yemen as a top concern after Afghanistan and Pakistan.
U.S. President Barack Obama told Saleh in September that Yemen's security was vital to that of the United States, offering more help to the impoverished country.
U.S. General David Petraeus, who discussed military cooperation with Saleh in Sanaa on Saturday, has said Washington will more than double its $70 million security aid to Yemen.
Yemeni armed forces, with at least indirect U.S. assistance, have staged several raids on al Qaeda targets in recent weeks.
But militant threats prompted the U.S. embassy, which was attacked twice in 2008, to close temporarily on Sunday. Britain and France have also shut their missions in the capital.
The United States has largely refrained from criticising the "Scorched Earth" military offensive that Saleh launched against Zaydi Shi'ite rebels in the north in August. But it has not endorsed government claims that Iran is supporting the rebels.
Alarmed at Yemen's slide toward chaos, the United States is throwing its weight behind a corruption-tainted government whose legitimacy and control is tenuous across swathes of the country.
Anti-U.S. sentiment is already rife among Yemen's 23 million people. Deeper U.S. entanglement in combating al Qaeda may spark more sympathy for the militants in a country awash with weapons. WHAT ARE THE SAUDIS DOING?
Saudi Arabia is the Yemeni government's biggest financial donor and most important ally, along with the United States, but some Yemenis resent the influence of their wealthy neighbour.
The Saudis fear that al Qaeda's local wing, renamed al Qaeda in the Arabian Peninsula (AQAP) a year ago, is trying to relaunch armed attacks from Yemen to destabilise the kingdom and possibly other U.S. allies in the oil-producing Gulf region.
In August an AQAP suicide bomber narrowly failed to kill the Saudi prince heading the kingdom's anti-terrorism campaign.
Disheartened by the failure of Yemeni forces to crush the Zaydi revolt, the Saudis themselves attacked the so-called Houthi insurgents in November after a cross-border rebel raid.
Riyadh announced last month that 73 Saudi soldiers had been killed and 26 were missing in the conflict, which it said was nearly over, even though rebels still held a Saudi village.
The Houthis, who on Thursday offered talks with Saudi Arabia to end the fighting, list among their grievances inroads made by Saudi-backed Sunni Muslim radicals in their northern heartland.
WHAT ROLE IS IRAN PLAYING?
Saleh's government, which portrays the Houthis as catspaws of Iran, has rejected Iranian offers to mediate in the conflict, which has long roots dating back to Yemen's 1960s civil war.
Iranian state media take a pro-Houthi line, echoing rebel accusations about Saudi and U.S. involvement in the fighting, but Tehran denies arming or funding the insurgents.
Western diplomats say they have little evidence of any Iranian support for the Houthis, whose Zaydi brand of Shi'ism is doctrinally distinct from that practised in Iran.
But Saudi intervention, as well as a strand of anti-Zaydi sentiment in Sunni-majority Yemen, might foster more shared interests between the Houthis and Iran, some analysts say.
WHY SHOULD THE WORLD CARE?
The botched airliner attack underlined the danger of Yemen becoming a haven for al Qaeda militancy. Any Yemeni state failure would also pose risks for Saudi Arabia and other Gulf states.
Concern has also focused on Yemen's proximity to failed Horn of Africa state Somalia, which sits across the Gulf of Aden and hosts a pirate community that preys on international shipping.
Nearly 20,000 ships pass through the Gulf of Aden each year, heading to and from the Suez Canal.
Somalia's rebel Islamist militant group al Shabaab said on Friday it was ready to send reinforcements to al Qaeda in Yemen should the United States carry out retaliatory strikes there.
Despite its own dire economic straits, Yemen hosts several hundred thousand Somali and other African refugees and migrants, many of whom try to move on to Gulf countries or Europe.
Yemen also faces a humanitarian crisis in the north, where U.N. agencies say the conflict has displaced more than 170,000 people since 2004. Across the country, more than half of Yemeni children show signs of stunting from malnutrition, they say.
Most foreign investment in Yemen is in oil and gas resources located in the south, where violent unrest broke out last year after an April 28 opposition rally to mark the 1994 civil war in which Saleh's forces defeated an attempt at secession.
Southerners, whose People's Democratic Republic of Yemen merged with the north in 1990, complain that northerners abused the union to grab their resources and discriminate against them. (Editing by Ralph Boulton)
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