During the Gulf War it was the base of operations for French forces, and France continues to maintain a significant military presence.

France has thousands of troops as well as warships, aircraft and armoured vehicles in Djibouti, contributing directly and indirectly to more than half the country's income. The US has stationed hundreds of troops in Djibouti, its only African base, in an effort to counter terrorism in the region.

OVERVIEW

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Djibouti's location is the main economic asset of a country that is mostly barren. The capital, Djibouti city, is a major transshipment point for goods entering or leaving Ethiopia. Its transport infrastructure enables several landlocked African countries to fly in their goods for re-export. This earns Djibouti much-needed transit taxes and harbour fees.

After independence from France in 1977, Djibouti was left with a government which enjoyed a balance between the two main ethnic groups, the Issa of Somali origin and the Afar of Ethiopian origin.

But the country's first president, Hassan Gouled Aptidon, soon installed an authoritarian one-party state dominated by his own Issa community. Afar resentment erupted into a civil war in the early 1990s, and though Mr Gouled, under French pressure, introduced a limited multi-party system in 1992, the rebels from the Afar party, the Front for the Restoration of Unity and Democracy (FRUD), were not allowed to participate.

As a result, Gouled's Popular Rally for Progress party won every seat and the war went on. It ended in 1994 with a power-sharing deal which brought the main faction of FRUD into government. A splinter, radical faction continued to fight until 2000, when it too signed a peace deal with the government of Gouled's successor, Ismael Omar Guelleh.

FACTS

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• Population: 721,000 (UN, 2005)
• Capital: Djibouti
• Area: 23,200 sq km (8,950 sq miles)
• Major languages: French, Arabic, Somali, Afar
• Major religion: Islam
• Life expectancy: 51 years (men), 54 years (women) (UN)
• Monetary unit: 1 Djiboutian franc = 100 centimes
• Main exports: Re-exports, hides and skins, coffee (re-exported from Ethiopia)
• GNI per capita: US $910 (World Bank, 2005)
• Internet domain: .dj
• International dialling code: +253

LEADERS

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President: Ismael Omar Guelleh

President Guelleh has ruled Djibouti since 1999

Mr Guelleh, known in Djibouti by his initials, IOG, won a second term in one-man presidential elections in April 2005. The opposition did not field a candidate in the poll.

During his campaign the president promised to tackle poverty and to reduce Djibouti's dependence on imported food. He said he would step down at the end of his second term, in accordance with the constitution.

Ismael Omar Guelleh succeeded his uncle and Djibouti's first president, Hassan Gouled Aptidon, in April 1999 at the age of 52.

He took office after being elected in a multi-party ballot which was not contested by Mr Aptidon.

A former head of security who worked for many years in his uncle's office, Mr Guelleh supports Djibouti's traditionally strong ties with France and has played an important role in trying to reconcile the different factions in neighbouring Somalia.