Kyrgyzstan's President Kurmanbek Bakiyev declared a state of emergency on Wednesday as dozens of people were killed in clashes between police and thousands of protesters demanding an end to his five-year rule.

Below are questions and answers about what is going on in Kyrgyzstan:

WHY IS THE UNREST SIGNIFICANT?

Kyrgyzstan, which lies at the heart of Central Asia, is central to Western efforts to contain the spread of Islamist militancy from Afghanistan.

The United States rents an air base in Kyrgyzstan which it uses to support its fight against Taliban insurgents in nearby Afghanistan. Russia also has an air base in the country.

A change of leadership in Bishkek could complicate the base agreements. Last year, Kyrgyzstan demanded the United States close the Manas base, but later agreed to let Washington keep the base for a higher rent.

Both the United States and Russia have expressed concern about what they regard as a rise in Islamic militancy in Central Asia. Kyrgyzstan shares the volatile Fergana Valley with Uzbekistan and Tajikistan, and was the target of cross-border raids by Islamic guerrillas in 1999 and 2000.

Foreign powers are nervous that if violence sweeps through Kyrgyzstan -- which borders China, Kazakhstan, Uzbekistan and Tajikistan -- it could have unpredictable consequences for the entire region.

Kyrgyzstan does not have any Eurobonds but the som currency is now at 7-year lows of around 45 per dollar.

WHAT HAS SPARKED THE UNREST?

Bakiyev, a former opposition leader who came to power after Akayev's ouster in 2005, has since been accused by the opposition of tightening his grip on power, jailing political opponents and failing to root out corruption.

"After the Tulip revolution in 2005, the hope was that after Akayev, Kurmanbek Bakiyev would be a different kind of leader and that didn't work out," said Reinhard Krumm, director of the Freidrich-Ebert Foundation think tank in Moscow.

Bakiyev won a second term by an overwhelming margin in July last year, but opponents and Western observers harshly criticized the election.

Bakiyev has come under fire for failing to improve the fate of the nation's 5.3 million inhabitants, a third of whom live below the poverty line. The average monthly wage is about $130.

Kyrgyzstan's $4.7 billion economy has been badly hit by sharp drop in remittances, which accounted for almost 30 percent of Kyrgyzstan's gross domestic product in 2008.

Economic growth slowed to 2.3 percent in 2009, after a rise of 8.4 percent the year before, but the economy would have contracted by 2.9 percent without the contribution of the Kumtor gold deposit which is mined by Centerra Gold Inc.

Canadian uranium miner Cameco Corp in December said it had agreed to sell its stake in Centerra.

HOW COULD IT END?

The opposition has been demanding that Bakiyev, who helped lead the "Tulip Revolution" protests in 2005, tackle corruption and fire his relatives from senior positions.

They have threatened to topple Bakiyev if he does not accede to their demands and protesters on the streets of Bishkek on Wednesday were calling for him to step down.

Much will depend on how Bakiyev responds in the crisis and how powers such as Russia, the United States and China react.

But analysts said Bakiyev faces a tough balancing act to keep control without aggravating the situation with heavy-handed measures. Russia has called for calm.

Riot police were using teargas to disperse protesters in Bishkek on Wednesday, a Reuters reporter said. Gunshots were also heard but it was unclear where they were coming from. Five bodies lay on the main square outside Bakiyev's office.

"What is happening in Kyrgyzstan is a crisis of authority, without a doubt, but that does not mean that a repeat of the Tulip revolution of 2005 is possible because Bakiyev, unlike Askar Akayev, has more solidarity within his circle," said Alexei Vlasov, an academic who specializes in the region at Moscow State University.

Longtime leader Akayev abandoned the presidential palace during the 2005 protests and fled to Russia.

"Senior security officials in general support Bakiyev and as a result, any signs of discontent will, I believe, be quite firmly suppressed as appears to be the case," Vlasov said.

"Bakiyev is highly dependent on outside support from China, Russia and the United States. If Moscow and Washington are silent I think Bakiyev will hold onto power."

Bakiyev has said on many occasions that he will use whatever means necessary to preserve peace and stability. He will be all too keenly aware from his own experience five years ago of the risk that demonstrations spiral out of control.

In a country divided along clan and geographical lines, much will also depend on how Bakiyev can appease influential leaders with the power to bring supporters into the streets.

"The problem is you have different clans in different areas, for example in Talas and Bishkek (in the north). They are all unhappy because Bakiyev, who comes from the south, wants to bring his son to power," said Krumm of the Freidrich-Ebert Foundation.