A story about Palau in the Travel section should have said that travel information is available from the Republic of Palau, Washington Representatives Office, 444 N. Capitol St., Suite 308, Washington, D.C. 20001, 624-7793, and from the Federated States of Micronesia, Representative Office, 706 G St. SE, Washington, D.C. 20003, 544-2640. (Published 1/13/88)

One night as we lay at anchor deep in the lagoon, it occurred to me that our route through the Palauan islands had taken us through all the stages of evolution from the beginning of the world to sometime before the appearance of Homo sapiens.

We had been at sea for a week, and one day -- I don't remember which -- Avi, our ship's captain and dive master, had led us straight out from the far side of the barrier reef into the open ocean at a depth of 60 feet. The water was thick with plankton and the bottom invisible, hundreds of feet down; within a few moments we had lost our bearings and all sense of direction except for up, where the light, though diffuse, was brighter than it was down. We swam energetically for some time, but in this chaos, this primordial soup, we might have been drifting sideways, swimming in parabola or describing some shape new to three-dimensional geometry.

I thought of Italo Calvino's story about the time before the galaxies solidified, when the first consciousness made the first sign in space to mark its having been there at some time. And as we swam, the six of us in parallel, I wondered whether, if we swam for an infinite distance, some or all of us might meet.

At some point along the way we saw a school of small sharks swimming above us and lateral to our trajectory. But the sharks, swimming fast, served as no marker in our undifferentiated space, and in any case were soon gone. Still, this crossing of paths brought an end to our journey, for as the sharks were apparently what he had wanted us to see, Avi swam to the surface and, taking his bearings, guided us back to the reef.

The islands of Palau (or Belau, as they are often called) lie at seven degrees latitude and 134 degrees longitude in the Pacific, nearly 500 miles from the nearest landfall in the Philippines. Yet passionate divers will fly halfway around the world to get to Palau, for its islands and reefs offer some of the most varied and spectacular diving in the world. After flying 1,000 miles south from Guam through the clear blue skies above the Pacific, they will go straight to the boat, put out to sea and not return until the fresh water on board gives out. Such were my companions from the United States. We had seen land but not touched it for a week. We had described arcs through the blue skies and blue water, leaving no tracks at all.

In diving there are moments, as you swim down from the surface, when you think you know what Icarus must have felt. Jump overboard and all the awkward heavy gear you have been staggering about with on the deck -- tank, weight belt, wet suit, gauges, flippers, mask and buoyancy compensator -- becomes suddenly weightless, and you are breathing underwater and swimming or, as it seems, flying without gravity. But that sensation is soon replaced by another, for to breathe compressed air you must breathe slower and deeper than is normal, and to conserve precious oxygen you must slow down your movements -- the deeper you go, the slower you must become.

Even at 30 feet you are not a bird or a fish but something reptilian, a low form of life, and a speechless one with limited vision. Looking about, you realize that every other creature in the sea, from shark to clam, is faster or better adapted and better designed than you. Rather than a macho sport -- as some still imagine it to be -- diving is a lesson in humility, especially when the current is swift or the visibility poor. And while it often seems effortless, it is strangely tiring, so tiring that, coming back up from the third or fourth dive of the day, you flop around on deck like a turtle out of water.

So for a week we had led a reptilian life: wake, feed, dive, come up, lie in the sun and read, dive, come up, feed, nap and so on. The weather was good, and the boat we had found -- a 60-foot steel-hulled sloop -- was a comfortable one for divers. Avi and Orly Klapfer, the young Israeli couple who owned and operated it, knew the waters well since they had been in Palau for six months after sailing around the world. They were good company, but on dive boats people tend to fall back into themselves, into sleep or daydreams or reveries of what they have seen underwater. Thus in a matter of a few days we had lost touch with all other realities.

For divers, a week in Palau is not enough even to begin an exploration of the reefs. The island cluster -- a section of the Western Caroline archipelago -- is 125 miles long and 25 miles wide. To the east there are stretches of reef, but on the western side the barrier reef runs almost the length of the cluster, sheltering the big island of Babelthuap, the capital island of Koror and some 340 other islands, most of them small and uninhabited. The islands are low and extremely old, geologically speaking; because they are made of volcanic rock and layer upon layer of coral limestone, the underwater topography is wonderfully diverse.

On the barrier reef we dived a series of walls that began near the surface and plunged to the ocean floor. Two of them had caves with 60- or 70-foot-high coral chambers; entering them from the top and swimming down with the light, we came to rest on their white sand floors and then swam out to sea through arches fringed by red and yellow sea fans. We dived sometimes in shallow channels, drifting a mile or two with the outgoing tide along a reef or across a sand bottom punctuated by coral heads.

On the west reef we dived a site known as the Blue Corners, a wide plateau 40 feet below the surface with drop-offs on three sides giving onto the open ocean. Palau is sparsely populated and its waters have not been commercially fished, so the reefs fairly bustle and teem with life. According to the guidebooks, Palau has 700 known species of coral and 1,500 species of fish. Counting is not something easily done underwater, but hanging out over the wall at the Blue Corners and watching the schools of reef and pelagic fish, I thought the numbers not exaggerated.

Left to ourselves, my companions and I might have spent all of our time on the barrier reef, but after a week Avi and Orly headed the sloop back into the lagoon and into the maze of low green islands. For most travelers -- for birders and biologists as well as vacationers -- these islands of the lagoon are the real attraction of Palau, and the reason for coming thousands of miles.

The Rock Islands, as they are known, are unique in the Pacific. They have birds and plants found few other places in the world and, in their 12 marine lakes, creatures that have evolved on their own separate paths over the course of millennia.

The islands are strange in aspect. From a distance they look like fuzzy green mushroom caps floating in the water. Close up you can see that they are in fact deeply notched at the waterline, the coral limestone having been eroded by the tides and the rainwater on the surface of the lagoon. They are covered in green jungle and skirted by water of an intense, almost neonlike, aquamarine. Landing at one of their tiny beaches in a skiff, you can look down through the water, as if through glass, to fish and coral 10 feet down.

One evening we threaded our way into the bay of Eil Malk, a semicircular island that embraces dozens of tiny round islets, each one barely distinguishable from the last. The channels between their green hills were so narrow it was like sailing into a jungle. Fruit bats, herons and kingfishers rose up around us, and the cry of parrots sounded louder than our engines.

In the morning we went ashore and climbed a small hill into a forest of enormous trees festooned with vines, ferns and orchids. An American plant biologist I met later in Koror told me he had never seen a tropical rain forest with such a variety of trees and shrubs as that one. The ecology of the forest was, he said, very much like that of the island reefs, for in both cases the layer of stored-up nutrients was thin, and plants and animals lived directly off each other, recycling each other completely with little left over; in both cases the great variety of life forms and the very intensity of their competition gave stability to the ecosystem. Indeed, in that forest there was no topsoil; the trees grew straight out of the jagged coral.

On the other side of the hill we came to a marine lake surrounded by mangroves. Putting on masks and fins, we found a channel through the root systems and swam out into the lake. The water was salty, dark green and hot -- almost blood temperature.

As we moved out beyond the shadow of the hill, several jellyfish appeared in the water. A few of them were flat and translucent white, but most were pale orange with clubs but no stingers beneath their shiny mantles. The biologist who discovered these jellyfish concluded that they must have come into the lake through the porous limestone thousands of years ago; as they came to dominate the lake, they gradually lost their stingers and began to live at least partly by photosynthesis. Swimming on across the lake, we saw a dozen of them below us, then a hundred, then a thousand; near the opposite shore where the morning sun had first reached, the water was thick with them from the surface down to a depth of 20 feet. Swimming through them, we would brush two or three of the silky creatures aside with one stroke. When we dived down and looked up at them, their bodies were luminous as Japanese lanterns. After a while we simply lay on the surface, saying nothing, gazing downward, transfixed: The hundreds of thousands of jellyfish were all moving in the same direction, pulsing slowly, delicately and, it seemed, with deliberation, each one a pale orange galaxy in the green water.

In the remaining days we dived in the lagoon, on the wreck of a Japanese tanker and in a series of caves half underwater with stalactites like crystal chandeliers. Finally we came back to port, to the muggy harbor where our sloop had its berth beside some dozens of motorboats. Three of my companions flew to Guam the next day, but two of us stayed on to visit the town and the big island: the Republic of Palau.

The town of Koror was said by our guidebook to be the most picturesque town in the former trust territories of Micronesia. This was clearly some reflection on the other island capitals, for the physical charms of the town reside mainly in its views of the Rock Islands and in an abundance of flowering trees. Architecturally it is modern and nondescript: concrete buildings with tin or tile roofs, a few two-story shop and office complexes. There are banks, mini-marts, video-rental stores, a baseball diamond and churches. When the offices let out, there are traffic jams on the main street in spite of, or perhaps because of, the fact that Palau has only 16 miles of paved roads.

Anyone looking for grass skirts or grass shacks would be sorely disappointed, not only in Koror but even in the most remote villages of the main island. Visibly, at least, there is nothing much left of traditional culture in Palau. True, one abai, or men's meeting house, has been curatorially preserved, and there is one native handicraft: the carving of storyboards, or wooden plaques depicting island folk tales. Yet even the storyboards are not entirely traditional: It was an American who made them into a salable handicraft, and the tales come from scholarly volumes in the Koror museum library rather than an oral tradition, while most of the carving is done by prisoners in the town jail. Since the prison guards get a 10 percent cut on the storyboards made within their jurisdiction, the jail with its tin sheds and dirt yard has become the premier tourist attraction in town.

The dearth of traditional art and architecture is understandable given the recent history of Palau. The islands were held by the Spanish for about 300 years, until they were sold to Germany after the Spanish-American war; 1914 began the Japanese occupation.

By the mid-1930s Palau had become the strategic command center for Japan's Pacific empire. Some tens of thousands of Japanese moved in; the precise number is unrecorded in Palau, but it was certainly two or three times that of the Palauan population. Most of them were military men, but there were also civilians sent out to produce raw materials for the homeland; thus in addition to fortifying the islands, they built roads, dug phosphate mines, planted crops and sent out a fishing fleet.

In 1944 the United States invaded. The Marines fought a bloody battle for the southernmost island; George Shultz, now secretary of state, served as beachmaster for the assault. While the U.S. Navy moved on, bottling up the Japanese fleet in Koror, American bombers destroyed everything the Japanese had built on the main islands.

Today you can still see remnants of the Japanese war machine scattered about the islands: the rusting hulks of tanks near the airport, artillery pieces in caves commanding the entrances to harbors and the intact body of a Zero plane in the shallows of a reef.

The asphalt landing strip for seaplanes is easily found, since a part of it serves as the foundation for the one first-class resort hotel in Palau. The hotel was built three years ago by a Japanese corporation, and while it attracts divers from all over the world, it depends principally on the huge new wave of Japanese fanning out as tourists across their former Pacific empire. The hotel is now one of the few large revenue-producing enterprises in Palau, for when the Japanese occupation ended, so too did all efforts at economic development.

The economy of the Republic of Palau these days can be best understood in terms of cargo cult eschatology. That is, the country produces almost nothing for export and very little for internal consumption -- yet it has grown rich on American aid. In 1981, when it became self-governing under U.S. protection, it had a total of 34 farmers and 1,127 government employes. Today, with the population standing at about 14,000, estimates are that half of all salaried workers are civil servants, and most of the rest of them are tradespeople, office workers and professionals.

What happened was simply this: After World War II Palau became a United Nations trust territory administered by the United States. Under the jurisdiction of the U.S. Department of the Interior, it was neglected for some years and then flooded with money. From the early 1960s on, the department made the islanders beneficiaries of every federal program on the books; it built schools and housing and installed municipal services; it also sent welfare checks and food stamps to families below the poverty line -- which, given the level of cash economy in Palau, was almost all of them. Palauans therefore quite naturally stopped doing what they were doing -- mainly fishing and growing taro -- and moved into the town, where the money was raining in. Now about two-thirds of all Palauans live in Koror and have, as one former Peace Corps worker put it, "pretend jobs in a pretend economy."

In other parts of Micronesia the creation of a welfare economy has turned the islands into desperate, bedraggled places ridden with alcoholism, drugs and teen-age suicide. But Palau has not so succumbed. True, beer is the second largest import item after fuel oil, both in cost and in volume, and driving is hazardous on Saturday nights. But Palauan culture survives in the form of a kinship system so complex it has baffled whole faculties of anthropologists. Made up of families and clans connected by matrilineage, patrilineage, adoptions and customary land rights, the system embraces just about everyone on the islands -- yet any Palauan can trace his relationship to any other as easily as if reading a map.

Then, too, after centuries of colonization Palauans have become a cosmopolitan people; they are quite well educated (schooling is compulsory through high school) and quite well trained for white-collar jobs. Manual labor is not their forte, but then for some time most manual labor -- from construction to domestic service -- has been done by Filipinos willing to work in Palau for a year or two at the U.S. minimum wage. Thus the average Palauan woman is not a drawer of water or a weaver of baskets but a secretary or a shopkeeper who goes to the hairdresser once a week. And on weekends half of the men in Koror will be tinkering with their motorboats, drinking beer and listening to cassette tapes. It is not a bad life.

Of course, Palauans, like the denizens of their reefs and their jungles, live on a thin margin: Remove American aid and there is very little left. On one hand, they are helpless and vulnerable as the stingless jellyfish. On the other hand, so it might be argued, they have adapted perfectly to their circumstances. Their problem, after all, is to deal with the United States and other large foreign entities, such as Japan. For that they need not taro growers and fishermen but politicians and lawyers -- and these they have in spades.

For the past eight years the United States and Palau have been at loggerheads over the future of their relationship. When Micronesia split up into regional entities, the Palauans began negotiations on their own and at the same time adopted a constitution that included provisions banning nuclear materials, preventing the government from allowing the use of eminent domain powers by a "foreign entity" and declaring a 200-mile territorial zone around the islands. These provisions were unacceptable to the United States, yet Palauans voted for them overwhelmingly in three separate plebiscites.

A few years later the U.S. offered Palau a Compact of Free Association that would give Palauans limited self-government and a cumulative total of $1 billion in aid in return for U.S. military basing rights over a 50-year period. A majority of Palauans approved the Compact, but the antinuclear provision in the Constitution proved a sticking point. Between 1983 and 1987 the Palauan government brought the voters to the polls five times but could never obtain the 75 percent of the vote that the provision stipulated was necessary to overturn the ban.

All during this period antinuclear activists in the United States and around the Pacific celebrated Palauans, hailing their resistance to the Compact as a principled stance against nuclear deployment. The reality was rather more complicated.

Roman Bedor, the lawyer usually identified by journalists as "the Greenpeace spokesman" or "the leading antinuclear activist" in Palau, told me that in fact the nuclear issue was rather remote from most Palauans. The constitutional provision, he said, "was adopted as a bargaining tool" to hold up the Compact -- for there were a great many other issues at stake.

At one point in the negotiations the United States laid claim to a third of the main island for jungle warfare training; it later reduced its claim and agreed not to test or store nuclear weapons in the islands. The Compact, however, still explicitly gave the United States the right of eminent domain, and certain clauses were so broadly worded as to contradict the rest and to give the Pentagon legal claim to all Palauan territory for whatever its purposes for 50 years. While American officials told Palauans that the islands were ill-suited to a large naval or air base, they told the U.S. Congress that Palau might be used for either or both as a fallback from the Philippines.

The Palauan government negotiated these issues for five years, but gradually its resolve was sapped. The annual subsidy from the United States diminished each year, in line with the Gramm-Rudman-Hollings Act, and a series of unwise investment decisions -- the most egregious of them made with the approval of the U.S. Interior Department -- plunged the government deeply into debt. Before the fifth vote on the Compact in June this year, the government cut back water and power in Koror and threatened to furlough 35 percent of its employes. When even that did not persuade the necessary number of voters, it took the legal recourse it had been avoiding for years: an amendment to the constitution. Since amendment required only a simple majority -- along with the approval of the state governments -- when the voters returned to the polls in August the government had the votes it needed to overturn the nuclear ban and, finally, to accept the Compact.

Antinuclear activists will doubtless now close the case on Palau, but the struggle is far from over. In the first place the amendment vote is open to legal challenge, and in the second place Palauan politicians have a fallback position of their own. "You see," Bedor said, "it's not the nuclear issue that's important, it's the constitution, and whether or not the courts agree that it supersedes the Compact as the supreme law of the land."

In fact government and opposition politicians alike now look to the constitution as their next line of defense, and their next bargaining tool. (It was designed as such -- thus the extreme reluctance of the government to invoke the amendment process.) The constitution not only gives Palau a means to fight the terms of the Compact in American courts, but it allows them to claim standing vis-a`-vis the United States in the United Nations.

Few, if any, Palauans want complete independence, and none is hostile to the United States. But they are girded for conflict, for even under the best of circumstances there will always be a problem of proportion. The United States has always dealt with Palau in terms of its own vast abstractions -- poverty or Pacific strategy -- and over the years Palauans have grown wise to this tyranny of scale. They have seen how American solutions overwhelm their problems and -- without intention -- devastate their fragile social and natural ecology. They have very little, so they invent -- and use American institutions to protect themselves. Award-winning journalist Frances FitzGerald's most recent book is "Cities on a Hill," published by Simon and Schuster. Reprinted with permission of Islands magazine, Vol. 7 No. 6,

1987, Islands Publishing Co., Santa Barbara, Calif. Micronesia has no representatives in the United States. For more information about travel to the area, contact a travel agent.