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More than 200 volcanic and coral islands, many of them surrounded by a single barrier reef, make up the northern Pacific nation of Palau.

The scenery ranges from white sandy beaches with an abundance of marine life to dense jungle. Palau favours sustainable tourism, which along with foreign aid is the mainstay of its economy.

Palau became independent in 1994, after being part of a United Nations trust territory administered by the US.

It relies on financial aid from the US, provided under a Compact of Free Association which gives the US responsibility for Palau's defence and the right to maintain military bases there.

Tourism is low key, although growing in economic importance. Many visitors come from Taiwan, with which Palau has diplomatic ties. Taiwanese aid boosts the economy. The government is Palau's largest employer.

Monoliths and other relics are reminders of an ancient culture that thrived on the islands, and despite Western trappings many Palauans identify strongly with their traditions and rites.

Palau's recent history has been dominated by outside influences from Spain, Britain, Germany, Japan and the US. Palau saw some of the region's fiercest fighting in World War Two.

In 2006, a new Congress building was opened at Ngerulmud, which replaced the republic's largest settlement, Koror City, as the country's capital.
Source: BBC.com