Yemeni militants have vowed to avenge the deaths of al-Qaeda trainees
By Ginny Hill, regional analyst
The Christmas Day plot to blow up Northwest Airlines Flight 253 in the skies over Detroit was hatched in an impoverished republic on the Arabian Peninsula, according to jihadist websites.
Suspected Nigerian plane bomber Umar Farouk Abdulmutallab told FBI investigators that he was trained in Yemen, where the CIA is running a "covert front" against al-Qaeda, according to the New York Times.
US military planners are growing increasingly concerned that Yemen could rival Iraq and Afghanistan as a security challenge, if they do not act pre-emptively to dismantle terrorist networks.
Population: 23.6 million (UN, 2009)
Major language: Arabic
Major religion: Islam
Oil exports: $1.5bn/24.5m barrels (Jan-Oct 2009)
Income per capita: US $950 (World Bank, 2008)
Trainers from the US military have been discreetly working with Yemen's elite counter-terrorism unit for several years.
But during the past 12 months, concern that al-Qaeda could establish a new "safe haven" in the Arabian Peninsula has been rising. Now, the budget for US military assistance to Yemen is doubling.
Earlier this month, President Barack Obama allegedly gave his personal approval for the Yemeni authorities to launch a missile strike against an al-Qaeda camp, killing more than 30 people.
A second strike, a week later, was targeted at a gathering of militant leaders, supposedly backed by US intelligence.
But Yemenis are warning that direct US intervention will inflame anti-Americanism and encourage violent extremism in this observant Muslim country, just several hundred miles from Mecca - the holiest site of Islam.
Yemen has become the new centre of gravity for al-Qaeda on the Arabian Peninsula, following the January 2009 merger of al-Qaeda in Yemen and al-Qaeda in Saudi Arabia to form a single transnational organisation.
In August, Saudi Arabia's deputy interior minister, Prince Muhammad bin Naif, narrowly escaped assassination when an al-Qaeda affiliate blew himself up at the prince's house.
If the state fails, al-Qaeda is sure to gain a greater foothold in the poorest country in the Middle East
The bomber, a Saudi national, had planned and prepared the attack across the border in Yemen.
In an echo of the Northwest Airlines plot, the suicide bomber packed PETN (pentaerythritol) explosives inside his body to evade detection but failed to kill his intended target.
The botched attack highlighted the intention of al-Qaeda operatives in Yemen to strike outside the country's borders.
It also underlined the importance of Yemen's internal security to Saudi Arabia, the region's largest oil producer.
Yemen's terrorist networks have reconstituted themselves since a 2006 jailbreak, when more than 20 suspected and convicted terrorists escaped from prison.
Since then, Yemen has also paid the price for security gains elsewhere in the region.
Crackdowns in Saudi Arabia, Iraq and Pakistan have encouraged al-Qaeda associates to flee to Yemen's "under-governed" areas, where the central government confronts the prospect of state failure.
The Yemeni authorities are fighting a costly civil war in the north, with the help of Saudi Arabia, and confronting a separatist movement in the south.
Yemen's economy is heavily oil-dependent but production has passed its peak and revenue available to the state budget is likely to dwindle to zero over the coming decade.
If the state fails, al-Qaeda is sure to gain a greater foothold in the poorest country in the Middle East.
Ironically, Yemen's poverty has played a part in maintaining its reputation for piety, which draws hundreds of Muslims and converts from all over the world to pray and study in its mosques and madrassas.
Many are devout scholars, attracted by the hardline brand of Salafi Islam that prospers in Yemen.
But Mr Abdulmutallab's claim that other al-Qaeda operatives are being trained in Yemen will raise concerns about the process of radicalisation in this strategic, populous Arab country.
Ginny Hill is director of the Yemen Forum at Chatham House, London.