Haruo Remeliik, the first elected president of Palau, was returning home early June 30 from a Saturday night out when he was accosted by a waiting gunman. The attacker shot the 52-year-old leader in the leg with a .32-caliber pistol, then pumped three more bullets into his neck and head.

The assassination came as a shock to the 12,200 inhabitants of this Micronesian island group in the western Pacific, a U.N. trust territory loosely administered by the United States since 1946 but largely self-governing since 1981, when it declared itself the Republic of Palau.

Once a bloody battleground, where Japanese troops fought practically to the last man against invading U.S. Marines in World War II, Palau is now known more as a playground for Japanese tourists and scuba divers.

Palau has no army, its leaders have no bodyguards, and only its 58 policemen are allowed to carry guns. Murders average one a year and are usually perpetrated under the influence of alcohol, with spears or knives and are almost never premeditated.

"For this kind of thing to happen here is unheard of," Ignacio Anastasio, a member of the Palauan Congress, said of Remeliik's assassination. "Such a crime is beyond imagination for us."

Three weeks after the murder, police charged four men -- including the son and nephew of Remeliik's main political rival -- with plotting and carrying out the assassination. But with an investigation continuing and government prosecutors unprepared for a mid-September trial date, the charges against the four were dropped "without prejudice" Friday.

Authorities said this left open the possibility of refiling charges against the four later, of including other alleged conspirators in the case or of refocusing the investigation against new suspects.

The mysteries of who killed Remeliik, and why, continue to preoccupy Palauans and generate a variety of theories. But now the attention of many is turning to an election set for Aug. 28 to choose his successor and a new vice president.

The election, in turn, inevitably has raised the main political and economic issue confronting Palau for the past several years: efforts to conclude a "compact of free association" with the United States that would end the trust status and give the islands autonomy in all but defense matters.

The main snag holding up the compact is a clash between Palau's antinuclear constitution and a U.S. request for military facilities on the islands. Palauans are dependent on U.S. aid. At the same time, they take fierce pride in their 1980 constitution, which reflects strong antiwar sentiment dating from World War II, combined with the antinuclear activism of a new generation of leaders who graduated from American schools in the 1960s and '70s.

For the United States, the issue of a compact appears to be attracting greater attention as the Pentagon dusts off contingency plans for fallback positions in case the troubled situation in the Philippines eventually forces the closure of two huge military bases there.

While Palau clearly could not accommodate a major U.S. military presence or substitute for either Subic Naval Base or Clark Air Base in the Philippines, it might be able to serve one of their functions -- for example, as a site for jungle training -- if the bases are dispersed, U.S. officials say.

Putting a military base on Palau is "only an option" that Washington wants available, one U.S. official said. "If you're keeping your options open, you keep them open everywhere you can."

Probably just as important, he said, is "strategic denial" of the area to the Soviets, who have shown increasing interest in the region.

"The Russians are interested in coming in, I'm sure," said Acting President Alfonso Oiterong, who was twice elected vice president under Remeliik and now is campaigning to succeed him. He said that during his visits to the United Nations in recent years, Soviet delegates have expressed to him their disapproval of the compact of free association with the United States and urged Palau to seek full independence.

"The Russians keep saying, 'As soon as you become independent, we will give you a lot of help,' " Oiterong said in an interview. "Personally I don't go for that."

Kiribati, formerly the Gilbert Islands, has been considering a Soviet-proposed fishing agreement that would allow up to 16 Soviet vessels to ply the islands' 2 million square miles of waters for a year in exchange for $2.4 million. Other Pacific island states have received similar offers but are waiting to see what happens with Kiribati, western diplomats said.

Meanwhile, the United States has been running into problems as it tries to conclude similar compacts of free association with Palau's Micronesian neighbors, the Marshall Islands and the Federated States of Micronesia.

Leaders of the two island groups complain that by attaching 72 amendments to enabling legislation for the compacts last month, the U.S. House of Representatives has undermined 15 years of negotiations on the accords.

The foreign minister of the Marshall Islands, Anton DeBrum, was quoted as complaining that the compact passed by the House "resembles more an instrument of annexation than one of free association."

Critics of the compact here point to the House action as proof of American bad faith. They insist that Palau should stick to its constitutional provision against the testing or storage of nuclear weapons, the use of nuclear power plants and the disposal of nuclear waste within Palauan territory unless specifically approved the three-fourths of the voters in a referendum, despite the lure of about $1 billion in U.S. aid over 15 years if the compact is approved.

To remove any conflict with the constitution, the government has sought 75 percent public approval of the compact in two referendums in the past two years, but the accord fell short of passage -- getting 62 percent of the vote in 1983 and 67 percent in 1984.

Remeliik, a critic of the compact before he was elected president, angered some of his constituents by changing his stand and strongly supporting it once in office. The issue of the compact has not been seriously advanced as a motive in his assassination, but the murder has had repercussions on it by effectively eliminating Remeliik's chief rival as a contender for the presidency.

Roman Tmetuchl (pronounced me tool), a wealthy businessman who unsuccessfully ran against Remeliik for president twice with support from antinuclear activists, suffered a blow to his political aspirations last month when his son, Melwert Tmetuchl, and nephew, Leslie Tewid, were among those charged with Remeliik's murder. Although investigators say there is no evidence the elder Tmetuchl was involved, the arrests forced him out of the running to succeed Remeliik in this month's special presidential election.

The two candidates for the post, Vice President Oiterong and Lazarus Salii, a member of the Palauan Senate and former compact negotiator, both hold similar views in favor of the accord.

In separate interviews, both suggested that a compromise could be reached with the United States that would allow transit, but not storage or testing, of nuclear weapons.

"Transit would give the United States no more and no less than what it needs," said Salii.

In the absence of any major political differences -- the two candidates each vow to carry on Remeliik's programs -- charges have been exchanged about how actively they support the compact and how fast it should be pursued.

All this has left critics of the compact with nowhere to turn.

"The Americans see this island as strategic, an ideal place for a military base," said Roman Bedor, a leading antinuclear activist. "We see it as home."

"If the U.S. military is going to protect the people of Palau from the Russians, then who is going to protect us from the U.S. military?" he asked. "They are treating us like the Indians."