Finite-state Markov chain (FSMC) models have often been used to characterize the wireless channel. The fitting is typically performed by partitioning the range of the received signal-to-noise ratio (SNR) into a set of intervals (states). Different partitioning criteria have been proposed in the literature, but none of them was targeted to facilitating the analysis of the packet delay and loss performance over the wireless link. In this paper, we propose a new partitioning approach that results in an FSMC model with tractable queueing performance. Our approach utilizes Jake's level-crossing analysis, the distribution of the received SNR, and the elegant analytical structure of Mitra's producer-consumer fluid queueing model. An algorithm is provided for computing the various parameters of the model, which are then used in deriving closed-form expressions for the effective bandwidth (EB) subject to packet loss and delay constraints. Resource allocation based on the EB is key to improving the perceived capacity of the wireless medium. Numerical investigations are carried out to study the interactions among various key parameters, verify the adequacy of the analysis, and study the impact of error control parameters on the allocated bandwidth for guaranteed packet loss and delay performance.