Creating a packet with a loopback label stack to detect network link/node failures

Systems and methods for creating loopback packets for transmission through a section of a network for the purpose of testing the operability of links and nodes in this section of the network are provided. A method, according to one implementation, includes a step of obtaining information, by a Network Element (NE), about the topology of the network related to at least the nodes in direct communication with a peer node. The method also includes a step of generating one or more loopback packets, where each loopback packet includes at least a header having a path list including one or more nodes of the plurality of nodes in the network. Each path list defines an order of nodes through which the respective loopback packet is to be transmitted.