This paper applies matrix-analytic approach to the examination of the loss behavior of a space priority queue. In addition to the evaluation of the long-term high-priority and low-priority packet loss probabilities, we examine the bursty nature of packet losses by means of conditional statistics with respect to critical and non-critical periods that occur in an alternating manner. The critical period corresponds to having more than a certain number of packets in the buffer; non-critical corresponds to the opposite. Hence there is a threshold buffer level that splits the state space into two. By such a state-space decomposition, two hypothesized Markov chains are devised to describe the alternating renewal process. The distributions of various absorbing times in the two hypothesized Markov chains are derived to compute the average durations of the two periods and the conditional high-priority packet loss probability encountered during a critical period. These performance measures greatly assist the space priority mechanism for determining a proper threshold. The overall complexity of computing these performance measures is of the order O(K²m₁³m₂³), where K is the buffer capacity, and m₁ and m₂ are the numbers of phases of the underlying Markovian structures for the high-priority and low-priority packet arrival processes, respectively. Thus the results obtained are computationally tractable and numerical results show that, by choosing a proper threshold, a space priority queue not only can maintain the quality of service for the high-priority traffic but also can provide the near-optimum utilization of the capacity for the low-priority traffic.