Another day in paradise: Palau has dozens of picturesque and peaceful islands. (SUN/Donald L. Telfer)

PALAU, Western Micronesia -- There are no people, faxes or noxious reptiles on Eil Malk. But the remote island contains a floating dock, a heavy rope to help hikers over the slippery rocks, and some 1.6 million jellyfish. The bane of swimmers the world over, jellyfish in Palau are as harmless as the tropical sunshine.

One of several sea-level lakes separated from the ocean by high ridges, Jellyfish Lake is located in the centre of the rolling rain forest island.

The lake was once a submerged reef that rose from the sea. With no natural enemies, the long tentacles of the jellyfish gradually evolved into stubby appendages, and the species lost its ability to sting.

The newest nation in the Pacific (1994), Palau is a mecca for divers.

"The waters are so clear," said our skipper, Maslin Masao, as he chewed a betel nut, "that you can drop a quarter down a hundred feet and tell whether it's head or tails."

We cruised through the stunningly beautiful Rock Islands, the water so calm and clear that the boat seemed to float on air. On the horizon, reefs burst to the surface as a rhapsody of turquoise waves surged onto a talcum-powder beach, receding with a ripple of applause.

Around every islet were yet more mushroom-shaped islands that appeared to float in the sapphire sea. At one, a young couple played in a lagoon, and came interestingly close to forgetting that they were not the only people in paradise.

Before the British discovered Palau in 1783, the people of Yap knew exactly where to find paradise. Located some 400 km north of Palau, the Yapese routinely made the round trip in outrigger canoes, navigating by the stars and waves. They searched for limestone, used to carve out their enormous stone money discs.

The island of Metuk ra Bisech is home to a huge aragonite rock. Shaped like a round disc with a hole in the middle to make it easier to carry, the stone is the largest currency in the world. Carved out of nearby caves, it measures about three metres in diameter and is 20 cm thick. Geologists describe it as crystalline calcite, which is as hard as marble.

"The money was as valuable as gold," said guide Clint Pary, who also chewed on a betel nut. "It was treasured because of the hazards of the journey to Yap and back in tiny canoes. The bigger the stones, the more value they had."

The arrival of Western traders in the late 1800s eliminated many of the hardships associated with the quest for stone money. In exchange for copra, the foreign traders allowed their large ships to be used to bring stone money from Palau. While it was much safer and faster than the outriggers, the value of the stones diminished considerably. Stone money, however, is still used as currency in Yap.

Palau's most famous handicraft is the storyboard. Carved from slabs of island wood, the boards are etched with intricate scenes from Palauan legends. Some sell for as much as $200.

A short hike away, Palau National Museum is the oldest museum in all Micronesia. It contains an interesting collection of Palau's rich artistic traditions such as jewelry, photographs of old Palau, and the spectacular wood carvings. Outdoors is a botanical garden, a monument to the people of Palau killed in the Pacific War, and a traditional bai, a meeting house used by Palauan elders.

The town of Koror is a pleasant community that invites exploration. Cars, taxis and trucks crept along at the posted 15-m.p.h. limit. There are four street lights in Koror, though only two were working. A huge new Outrigger hotel under construction dominated Main Street, lined with Japanese restaurants renowned for serving generous seafood dinners.

I prepared to return to my hotel before the midnight curfew when everyone retires for the day. That's the way it is on the edge of Eden. People get lots of sleep and no one is in hurry.

If you go:

WHERE IT'S LOCATED: The largest island in Micronesia and the first U.S. territory to see the sun, Guam is located west of the international dateline, about 6,000 km west of Honolulu. Palau is located 1,300 km southwest of Guam.

GETTING THERE: Continental Micronesia, a subsidiary of Continental Airlines, serves the vast region from its base in Honolulu. It's a seven-hour flight on a DC-10 from Honolulu to Guam, and at least 12 hours on a 727 if you take the multi-island milk run. Continental Vacations, (800) 634-5555.

POPULATION: Palau's 17,000 residents welcome some 75,000 visitors a year.

DOCUMENTS: Palau has been an independent country since 1994, and a passport is required for all visitors.

ACCOMMODATIONS: Hotels popular with North American travellers are the Palau Pacific Resort in Palau (680) 488-2600. Expect to pay US$200 a night and up for doubles, though packages with air travel can lower the cost considerably. There also is a range of budget hotels, condominiums and bed-and-breakfast inns to choose from.

INFORMATION: Palau Visitors Authority, PO Box 256, Koror, Republic of Palau, 96940. Tel: (680) 488-2793. Fax: (680) 488-1453.