The tiny landlocked Eastern European republic of Moldova is still trying to resolve a separatist dispute within its territory more than 16 years after the dissolution of the Soviet Union.

Moldova was once a breadbasket of the former Soviet Union, known for its agricultural bounty and fine wines, but has struggled to adapt to its independence and is now the poorest country in Europe. A fifth of its 3.8 million population lives on less than $2 a day (Source: UNDP).

By 2000, less than a decade after independence, Moldova's economic output had fallen by nearly 50 percent. As a result of crushing poverty and rising unemployment, more than 800,000 Moldovans are believed to be working abroad - the majority in European Union countries and others in Russia. One in four young people is believed to be an economic migrant. However, most are working illegally and thus vulnerable to exploitation.

Human trafficking is a significant problem in Moldova and has caused great concern internationally. The European Union is particularly worried as the accession of Romania in January 2007 means the bloc now borders a nation that has no control over more than a tenth of its territory.

Transdniestria - a sliver of land between the Dniestr river and Ukraine - declared independence from Moldova in September 1990 and remains defiantly separatist. Its position has been backed up by the remnants of the 14th Russian Army, which has been stationed in the territory since Soviet times.

The region, also called Transdniester, is home to 630,000 people - half are Moldovan and half Russian/Ukrainian, according to Brussels based think tank International Crisis Group.

Moldova, like other ex-Soviet states, split from the Soviet Union in 1991, but its recent history has been blighted by a short civil war between government forces and those of the breakaway republic, and its inability to adapt to life without support from Moscow.

Moldova's current difficulties stem largely from the border changes between Romania and Ukraine, which surround Moldova, and the effect of Russification during the Soviet period. This has contributed to lingering suspicion in the disputed area between its Moldovan - ethnic Romanian - people and the Russian/Ukrainian Slav population.

In 1924, the USSR established the Moldavian Autonomous Soviet Socialist Republic (MASSR) - which included the area of Transdniestria - as an autonomous region within the Ukrainian Soviet Socialist Republic. The territory was briefly recaptured by Romania during the Second World War, but the Soviet Union won it back in 1944 and Bucharest was forced to officially cede the land during the 1947 peace talks in Paris.

In spite of the Soviet Union's ethnic policy which sought to impose the Russian language and culture on its constituent parts, the Romanian language (known locally as Moldovan) continued to be used and was made an official language in 1989. A year later, the Moldovans called for greater sovereignty within the USSR, and declared their independence in 1991.

Many ethnic Russians and Ukrainians in the Transdniestria region feared that this was a precursor to reunification with Romania.

Civil war between Slav separatists and Moldovan troops broke out in Transdniestria in early 1992, leading to fierce fighting in Bendery, a city claimed by the separatists. Several hundred people were killed and many more injured.

The Moldovan authorities originally registered some 51,000 internally displaced people although some agencies estimate as many as 130,000 may have fled. The U.N. refugee agency UNHCR believes most returned home within a short period of time.

The intervention of Russian forces soon stalled the conflict and a ceasefire was announced in July 1992. A trilateral peacekeeping force consisting of soldiers from Moldova, Russia and Transdniestria was sent to the area and has patrolled it ever since. Many attempts have been made to resolve the crisis but all have failed.

The Organisation for Security and Cooperation in Europe has overseen talks to settle the conflict. But these broke down in 2006 when Moldova and Ukraine imposed new customs checks on exports from the region to curb what they said was rampant smuggling.

The move - backed by the United States, European Union and the OSCE - was condemned by Transdniestria as an "economic blockade".

The pro-Moscow separatist area is not recognised by any country or international organisation, and its presidential and parliamentary elections have been declared null by the Moldovan authorities and the OSCE, which has had a presence in the area since 1993.

Western countries, Moldova and its neighbours view Transdniestria as a haven for people smuggling drugs, guns and humans across the often porous borders of the former Soviet Union countries.

Moscow's influence has complicated matters. At an OSCE-brokered summit in Istanbul in 1999, Russia agreed to withdraw its remaining troops from Moldova within two years, but around 1,200 remain. The Russian authorities have cited security worries as their reason for keeping a military presence, and insist troops will stay until a settlement is reached on the final status of the territory.

However, a 2004 report by Crisis Group accused Russia of exploiting the area's political and economic interests for its own ends.

Crisis Group's European director Nicholas Whyte said: "Russia's ... largely unilateral attempts to resolve the Transdniestrian conflict betray an almost Cold War mindset.

"Moscow has tended to see the EU, US and the OSCE as rivals for geopolitical influence on its 'turf' rather than as partners in efforts to mediate the serious conflict between the legitimate government in Chisinau and [the separatists]."

In March 2006, Moldovan President Vladimir Voronin spoke out against Russia's military presence. Referring to the Istanbul agreement, he accused Moscow of having occupied Moldovan territory "illegally and against all international norms" since 2002.

Voronin, the only elected communist president in a former Soviet state, was originally pro-Moscow. But relations have soured and he wants Moldova to join the European Union.

In a referendum in Transdniestria in September 2006, voters overwhelmingly backed the region's self-proclaimed independence and its leaders' plans for Transdniestria to eventually join Russia. Moldova and the West dismissed the vote as illegitimate.

In December, Transdniestria re-elected pro-Russian leader Igor Smirnov for a fourth consecutive term as president. No western observers attended, but Russian observers declared the vote free and fair.

The OSCE Mission to Moldova was established in 1993 and opened an office in Tiraspol, the main town in Transdniestria, in 1995. Its task is to facilitate a political settlement to the conflict. Its other activities include democratic transformation, human rights, combating human trafficking and military security.

Although Moscow insists it won't withdraw its troops and equipment until a settlement is reached, there has been some progress on disarmament.

By February 2005, the OSCE had confirmed that 11 trains packed with military equipment and 37 trains carrying more than 22,000 tonnes of ammunition had left the country. The Russian Federation withdrew more than 140 artillery and other vehicles and destroyed around 300 more between 2000 and 2003.

However, the OSCE estimates 20,000 tonnes of ammunition and some 40,000 pieces of military equipment are still in the breakaway region.

Moldova has already successfully negotiated with another breakaway group within its borders, and some analysts remain hopeful a similar agreement can be reached on Transdniestria with the help of the international community.

The Turkic minority known as the Gagauz, around a quarter of a million of whom live in the south of Moldova and the southwest of Ukraine, now enjoy full autonomy within Moldova following an abortive bid to declare independence in August 1991.

Gagauz campaigners - traditionally pro-Moscow and worried that the dissolution of the Soviet Union could lead to reunification with Romania - kept the pressure on the Moldovan authorities and were granted autonomy in 1994.

It has three official languages - Gagauz, Moldovan and Russian - and is often regarded as a textbook example of how to resolve minority issues within a multi-ethnic nation.

Similar talks were held with the Transdniestrian authorities but to no avail. Voronin has expressed his determination to resolve the dispute peacefully - but is adamant that Russian influence must not be allowed to split his country.

"The Transdniester regime is and will remain a puppet ruled by Russia," he said in 2004. "But I will never allow this region - this huge, black and corrupt morass - to get away."