When Pakistan's railways minister Ghulam Ahmad Bilour offered $100,00 for the assassination of Nakoula Basseley Nakoula, producer of anti-Islam movie The Innocence Of Muslims, it was either an extreme form of movie criticism or a hot-headed act which lends weight to the theory Pakistan is on its way to becoming the world's latest failed state.

It already ranks 13th in the list of failed states by the prestigious Foreign Policy magazine.

As events have demonstrated, that ranking is not undeserved. Last week, over 20 people died in clashes with police in several cities as thousands attacked cinema houses, police stations, banks and shops. Though the government blamed Taliban elements and other extremist groups, the violence replicated other protests in the Islamic world in which dozens were killed, including the US ambassador to Libya

Bilour's action has been condemned by the government of Pakistan. He has been disowned by his Awami National Party, which is part of the ruling coalition. But there has also been some sympathy for him, since most Muslims have been deeply offended by the film's portrayal of the Prophet Mohammed as a child molester.

Even a liberal such as Hina RabbanI Khar, Pakistan's first female foreign minister, revealed in New York last week that while she was "embarrassed" by the violence and did not condone it she understood that "if something is sensitive to Muslims and you can't really understand it, maybe you need to show some respect for that sensitivity and try to have a deeper debate to see what are the best ways to handle it."

Nakoula's film has revealed deep fissures in Pakistani society. As a US diplomat put it: "You can't have cabinet ministers mouthing off and putting prices on people's heads. This isn't the wild west but a country with pretensions to civilised behaviour."

1. GUN LAW: PAKISTAN AND TERRORISM

Pakistan is no stranger to violence. The current head of state, Asif Ali Zardari, lost his wife, the former prime minister Benazir Bhutto, to gunmen in 2007 and already this year 4847 people have been killed in terrorist incidents. The latest victim was veteran army bomb disposal officer Hukam Khan who was killed on Friday while trying to defuse a terrorist bomb in the city of Peshawar.

There are several reasons for the bloodshed. Pakistan is home to extremist Islamic groups including al-Qaeda, the Taliban, Lashkar-e-Taiba and the Harkat-ul-Mujahideen who seek to overthrow the state and are profoundly anti-Western in outlook. State-sponsored terrorism through the government's Inter-Services Intelligence agency is also a factor, as is the country's proximity to Afghanistan. Ever since the beginning of the so-called war on terror following the 2001 attacks on the US, Taliban warlords and fighters have taken up residence in Pakistan's tribal areas which form a buffer with Afghanistan and used them as bases for attacks on Western targets.

In short, Pakistan is a terrorist breeding ground and sectarian and political violence has been endemic for most of its history – the country came into being in 1947 following the partition of India. Earlier this year the US withheld $1 billion in aid as a protest against the country's involvement in state-sponsored terrorism. "There is no shared interest against Islamic terrorism," said Californian Congressman Dana Rohrabacher at the time. "Pakistan was and remains a terrorist state."

It was also noted in Washington that Pakistan was the only country in the world that permitted hundreds of people to demonstrate in favour of al-Qaeda after the assassination of Osama bin Laden by US Special Forces in May 2011. It was also noticeable that most of the debate about the killing of bin Laden concentrated on the violation of Pakistan's sovereignty, while little was said about how the world's most-wanted terrorist had managed to lived without notice in the Pakistani garrison town of Abbottabad.

The country's mindset is also part of the equation. Many Pakistanis subscribe to the view that they should forge a modern pluralist society with open links to the rest of the world but this is balanced by anti-Western sentiment and a feeling of respect for conservative, inward-looking Islamic values. In this mix victim-hood also plays a part, a fact acknowledged by President Zardari in a well-received speech at the UN General Assembly in New York last week when he argued that his country had paid more than its fair share in the war on terrorism.

"To those who say we have not done enough, I say in all humility: please do not insult the memory of our dead, and the pain of our living. Do not ask of my people, what no-one has ever asked of any other peoples. Do not demonise the innocent women, and children of Pakistan. And please, stop this refrain to do more."

2. DEATH BY DRONES: PAKISTAN AND THE US

Despite widespread US distrust about Pakistan's motives, the country remains an acknowledged player in the war against terrorism. Partly the role was foisted on it by the Bush administration in 2001 and partly it has served the interests of successive Pakistani presidents to be seen as Washington's ally. It is also true that the Pakistani armed forces are not unhappy as they have received modern weapons as part of the deal.

But that support has come at a price. Many Pakistanis dislike the West and this tendency has been reinforced by the widespread US use of missile-equipped drones, especially in the tribal areas. The weapons have hit some important targets including the recent killing of Abu Kasha al-Iraqi, a senior al-Qaeda commander, but they have also killed indiscriminately with scores of innocent victims. In November last year, 24 Pakistani soldiers were killed in an air strike near a border post and although the US apologised for the incident mistrust still runs deep.

In an attempt to win over doubters, unnamed government sources in Washington alleged last week that the drones policy had the tacit support of the Pakistani government because possible targets were revealed in advance of any attack. It was an improbable assumption as the Pakistani military never responded to any of the US contacts and last week a government spokesman in Islamabad rebutted the US comment by reconfirming Pakistan's position:

"Drone attacks are illegal, counter-productive, in contravention of international law and a violation of Pakistani sovereignty. There can be no question of Pakistan's agreement to such attacks."

The row over the use of drones has also been complicated by the decision taken earlier in the month by Secretary of State Hillary Rodham Clinton to designate the Pakistan-based Haqqani network as a terrorist organisation. Described by a US diplomat as "the Sopranos of the Afghan conflict", the network is a highly sophisticated and dangerous organisation which has been built on the profits from kidnapping, extortion and trafficking and is viewed therefore as an implacable foe.

It was clearly in Washington's interests to blacklist the Haqqani network as it is known to enjoy close links with the Taliban, but in Pakistan the decision was seen as yet another example of Washington dictating to Islamabad. All this has come at a time when Pakistan's relationship with the US is at an all-time low and when US diplomats concede that their ability to influence their ally is limited by other factors such as Pakistan's failing economy and the widespread corruption in the country's administration. "We're concerned about what happens if Pakistan does begin to unravel," says Stephen Cohen, a senior fellow at the Washington-based Brookings Institution think tank. "It's not simply Bosnia or Congo or Nigeria. It's got 100-plus nuclear weapons."

3. THE NUCLEAR TRIGGER: PAKISTAN AND INDIA

Despite widespread US distrust about Pakistan's motives, the country remains an acknowledged player in the war against terrorism. Partly the role was foisted on it by the Bush administration in 2001 and partly it has served the interests of successive Pakistani presidents to be seen as Washington's ally. It is also true that the Pakistani armed forces are not unhappy as they have received modern weapons as part of the deal.

But that support has come at a price. Many Pakistanis dislike the West and this tendency has been reinforced by the widespread US use of missile-equipped drones, especially in the tribal areas. The weapons have hit some important targets including the recent killing of Abu Kasha al-Iraqi, a senior al-Qaeda commander, but they have also killed indiscriminately with scores of innocent victims. In November last year, 24 Pakistani soldiers were killed in an air strike near a border post and although the US apologised for the incident mistrust still runs deep.

In an attempt to win over doubters, unnamed government sources in Washington alleged last week that the drones policy had the tacit support of the Pakistani government because possible targets were revealed in advance of any attack. It was an improbable assumption as the Pakistani military never responded to any of the US contacts and last week a government spokesman in Islamabad rebutted the US comment by reconfirming Pakistan's position:

"Drone attacks are illegal, counter-productive, in contravention of international law and a violation of Pakistani sovereignty. There can be no question of Pakistan's agreement to such attacks."

The row over the use of drones has also been complicated by the decision taken earlier in the month by Secretary of State Hillary Rodham Clinton to designate the Pakistan-based Haqqani network as a terrorist organisation. Described by a US diplomat as "the Sopranos of the Afghan conflict", the network is a highly sophisticated and dangerous organisation which has been built on the profits from kidnapping, extortion and trafficking and is viewed therefore as an implacable foe.

It was clearly in Washington's interests to blacklist the Haqqani network as it is known to enjoy close links with the Taliban, but in Pakistan the decision was seen as yet another example of Washington dictating to Islamabad. All this has come at a time when Pakistan's relationship with the US is at an all-time low and when US diplomats concede that their ability to influence their ally is limited by other factors such as Pakistan's failing economy and the widespread corruption in the country's administration. "We're concerned about what happens if Pakistan does begin to unravel," says Stephen Cohen, a senior fellow at the Washington-based Brookings Institution think tank. "It's not simply Bosnia or Congo or Nigeria. It's got 100-plus nuclear weapons."