Bhutan is a tiny, remote and impoverished kingdom nestling in the Himalayas between its powerful neighbours, India and China.

Almost completely cut off for centuries, it has tried to let in some aspects of the outside world while fiercely guarding its ancient traditions.

The Bhutanese name for Bhutan, Druk Yul, means "Land of the Thunder Dragon" and it only began to open up to outsiders in the 1970s.

The Wangchuck hereditary monarchy has wielded power since 1907. But Bhutan became a two-party parliamentary democracy after elections in March 2008. This gave a landslide victory to the pro-monarchy Bhutan Harmony Party of former prime minister Jigme Thinley. The opposition People's Democratic Party also supports the monarchy.

Bhutan's ancient Buddhist culture and breathtaking scenery make it a natural tourist attraction.

Tourism is restricted; visitors must travel as part of a pre-arranged package or guided tour. Backpackers and independent travellers are discouraged.

King Jigme Singye Wangchuck – the father of the present monarch – went to great lengths to preserve the indigenous Buddhist culture of the majority Drukpa people. This ethnic group has a common culture with the Tibetans and other Himalayan peoples.

National dress is compulsory – the knee-length wrap-around "gho" for men and the ankle-length dress known as the "kira" for women.

The Bhutanese monarchy has also promoted the philosophy of "Gross National Happiness" (GNH), which strives to achieve a balance between the spiritual and the material.

But by the 1990s, attempts to stress the majority Buddhist culture and the lack of any political representation had led to deep resentment among the ethnic Nepali community in the south.

Violence erupted and tens of thousands of Nepali speakers fled to refugee camps in Nepal.

Some 100,000 refugees live in UN-supervised camps in Nepal. Out of this refugee population have sprung a number of insurgent groups – the Bhutan Communist Party (Marxist-Leninist-Maoist), the Bhutan Tiger Force and the United Revolutionary Front of Bhutan.

The Bhutanese security forces believe they are behind the wave of bombings that rocked the kingdom in the run-up to the 2008 parliamentary elections.

The leaders of Nepal and Bhutan had promised to try and repatriate the refugees before the elections. However, there has been little progress on this front.

India does not allow the refugees onto its territory which lies between Bhutan and Nepal, and although the US and some other countries have agreed to accept tens of thousands of the refugees, some refugee leaders say that the only acceptable path is complete repatriation to Bhutan.

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