The cradle of the Islamic civilisation and home to two of Islam's holiest sites, Saudi Arabia has emerged from being an underdeveloped desert kingdom to being the leading producer of oil in the world, which has brought enormous wealth.
However, vast economic mismanagement and near complete reliance on foreign expertise and labour to run the country's economic affairs has created huge debt.
Added to this is the aftermath of the 11 September 2001 attacks on the US, which placed Saudi Arabia under the hot glare of American scrutiny.
Saudi Arabia is located in the Middle East, bordering the Gulf and the Red Sea, north of Yemen; to its north is Jordan, Iraq, and Kuwait; to its southeast is the United Arab Emirates and Qatar. It has a land area of about 2,240,000 sq km.
Saudi Arabia is the birthplace of Islam. Muhammad, the prophet of Islam, was born in Makka in 570CE to a family belonging to a branch of the Quraysh, the dominant tribe in the city.
After Muhammad's death in 632CE, the Muslim community was guided by caliphs who succeeded the prophet's role as political leader.
The first four caliphs ruled from Makka and Madina, which are considered Islam's holiest cities today. Caliphs oversaw the rapid expansion of an Islamic empire through peaceful conversion and military conquest.
By 650CE an organised Islamic state ruled a newly unified Arabian Peninsula as well as the entire Fertile Crescent (what is now Iraq, Syria, Lebanon and Israel) and Egypt.
The Umayyad dynasty moved the seat of the caliphate to Damascus in 661. The political centre of the great Islamic empire would remain outside the peninsula until modern times.
The Saudi state began in central Arabia in about 1750.
A local ruler, Muhammad bin Saud, joined forces with an Islamic reformer, Muhammad Abd al-Wahhab, to create a new political entity.
During the next 150 years, the fortunes of the Saud family rose and fell several times as Saudi rulers contended with Egypt, the Ottoman Empire, and other Arabian families for control on the peninsula.
At the beginning of the 20th century, Abd al-Aziz ibn Saud began a campaign of re-conquest of the Arabian Peninsula with the recapture of Riyadh in 1902. By 1925, he had conquered Makka, home to Islam's holiest mosque.
Ibn Saud proclaimed himself king of al-Hijaz (the heart of the Arabian Peninsula which contains the political and religious centre) in 1926 and in 1932, after unifying the outer territories. He renamed his vast realm Saudi Arabia.
Modern political history
Since Ibn Saud's death in 1953, he has been succeeded by several sons.
In the 1930s, the discovery of oil - the biggest deposits anywhere in the world - transformed the country. The Al Saud dynasty's monopoly of power has meant that during the 20th century successive kings were able to concentrate on developing the country's role as a regional power.
The mid-60s saw external pressures generated by Saudi-Egyptian differences over Yemen. However, it was the Arab-Israeli war of June 1967, in which the Saudis did not directly participate but helped provide annual subsidies to Egypt, Jordan, and Syria to support their economies, which transformed relations and gave Saudi Arabia a bigger political role.
During the 1973 Arab-Israeli war, Saudi Arabia participated in the Arab oil boycott of the United States (and Netherlands).
A member of the Organisation of Petroleum Exporting Countries (OPEC), Saudi Arabia had joined other member countries to moderate oil price increases beginning in 1971.
After the 1973 war, the price of oil rose substantially, dramatically increasing Saudi Arabia's wealth and political influence.
In June 1982, King Khalid died, and Fahd became king and prime minister in a smooth transition. Another half-brother, Prince Abd Allah, commander of the Saudi national guard, was named crown prince and first deputy prime minister.
Under King Fahd, the Saudi economy adjusted to sharply lower oil revenues resulting from declining global oil prices and this led to a cutback in generous oil supplies they used to offer their neighbours.
The ruling family welcomed the stationing of US troops in the country after Iraq's invasion of Kuwait in 1990, yet offered much less support just over a decade later with the US-led war on Iraq in 2003.
Part of the change in attitude lies with the consequences of Saudi support for the mujahidin struggle against the Soviets in Afghanistan, during the mid-80s, which had an adverse effect back home.
The refusal to tolerate any kind of opposition internally and to drive these elements overseas to such wars as in Afghanistan, led to the growth of dissident groups such as Usama bin Ladin's al-Qaida (who vehemently opposes the Saudi ruling elite – which it sees as corrupt; are against the presence of US troops in Muslim lands and US support for Israel).
In May 2003, human bombers suspected of having links with al-Qaida killed 35 people, including foreigners, in the capital, Riyadh.
Since then, a guerrilla war between the government and militants has been ongoing in the kingdom.
Official name: Kingdom of Saudi Arabia
Form of government: Monarchy with council of ministers
Gained independence: 23 September 1932
Saudi Arabia is an oil-based economy with strong government control over major economic activities. The kingdom has the largest reserves of petroleum in the world (26% of the proved reserves), ranks as the largest exporter of petroleum, and plays a leading role in Opec.
The government is supporting private sector growth to lessen the kingdom's dependence on oil and increase employment opportunities for the swelling Saudi population.
Currency: Riyal (SAR) - 1 USD = (app) 3.75 SAR
Natural resources: Oil, natural gas, iron ore, gold, copper
Major industries: Oil production and refining, petrochemicals, cement, construction, fertiliser, plastics
GDP: $242bn (2002 est)
GDP annual growth rate: 1% (2002 est)
Per capita GDP: $10,500 (2002 est)
Imports: 23% of GDP (2002 est)
Exports: 40.8% of GDP (2002 est)
Saudi Arabia has land forces (army), a navy, air force, air defence force, national guard, ministry of interior forces.
These forces, trained in part with US assistance, are equipped with modern weapons and advanced aircraft.
As recently as last year, the kingdom hosted the largest US military presence in the region.
Since the mid-60s, Saudi Arabia's defence expenditures have increased dramatically.
Military budget: $21.3bn (2002 est)
Army size: 124,500 active troops
Saudi Arabia is rich with Islamic history, especially in Makka and Madina. In the face of what is considered an austere and rigid practice of Islam known as Wahhabism, there have been attempts to create and promote world-renowned Saudi cultural institutions.
Languages: Arabic (official)
Religions: Islam 100%
Ethnic diversity: Arab 90%, Afro-Asian 10%
Literacy rate: 78.8%
Important Media: Al-Watan (daily newspaper), Al-Riyadh (daily newspaper), Arab News (English newspaper), Saudi TV (state-run, operates four networks), Saudi Radio (state-run), Saudi Press Agency (SPA) (state-run)
Sources: World Bank, countryreports.org, MSN Encarta, politinfo.com, The World Almanac