GSPC (Salafist Group for Preaching and Combat) is the most dangerous Islamic terrorist group in Algeria, and is down to a few hundred members, split into factions. 

The other Algerian Islamic rebel group GIA, is all but wiped out and said to have only a few dozen members left.

Last year, the GSPC split into at least three factions because of internal rivalries. Two groups stayed in northern Algeria and have been hurt badly by police and army operations. The third faction headed south, to the  border between Algeria and Morocco.

The GSPC has openly declared its cooperation and alliance with al Qaeda. This has long been suspected. The GSPC originally split off from the older GIA (Armed Islamic Group) because the GSPC people wanted to kill large numbers of civilians in order to terrorize the population into supporting the rebels. The GIA wanted to continue to just attack government and military targets.

Last year, factional fighting in the GSPC  led to the death of  its leader, Hassan Hattab.  A major reason for Hattab's death was the kidnapping pf  32 European tourists a year ago in southern Algeria. Hattab did nothing to stop this, even though the kidnappers belonged to the GSPC. The kidnapping made it a lot more difficult for the GSPC to operate in Europe (which is used as a base area for recruiting and fund raising). The new GSPC leader, Nabil Sahraoui (alias Abou Ibrahim Mustapha) has much closer ties to al Qaeda. Back then, the government estimated that GSPC had only about 400 armed members left. But since the kidnappers collected a five million dollar ransom from European governments (for the release of their citizens), the groups is buying weapons and recruiting again. 

While the Islamic rebels have been reduced to a few hundred diehards,  the government has to face broader resistance from the general population. The people running the government are the same group of elderly revolutionaries that led the revolution against France in the 1950s and 60s. This group, now in its second generation, because corrupt early on. Corruption and mismanagement of the economy have led to high unemployment and low economic growth. The people are unhappy and another revolution is in the air. In the early 1990s, Islamic parties were popular, but these are now seen as bloody minded radicals. But the people want a change, one way or another.