Two words: Blue Corner.
type it in any search engine and you'll have thousands of hits.
Dive with a reef hook, inflate your BC for a bit of positive buoyancy, park on the edge of the wall... and simply watch the big sharks patrol along the wall.
Equipment: You will be at 20~25m, so you will need full scuba gear.
Updated May 3, 2009
Website: http://www.visit-palau.com/aboutpalau/divemap.html
Jellyfish Lake: Take a short hike over the ridge to get to the lake that makes the island a doughnut. In a limestone island, the water trapped in this lake is eternally baked in the sun and reaps the nutrients of the island's runoff. There are millions and I mean millions of jellyfish, both Mastigias and moon jellies. Having lived in this lake for centuries, without natural predators, they have lost their sting for hunting prey. I believe they instead use algae cells inside their bodies to basically feed themselves.
More info see link below and:
http://www.visit-palau.com/aboutpalau/divemap.html
Equipment: This is a snorkel only site. The extra equipment of scuba can injure the delicate jellyfish. Also, surface depths is all you need since the water becomes concentrated with H2S at depth.
Updated Apr 4, 2011
While it is not technically a lake, but rather a small sheltered bay, Mandarin Fish Lake is a wonderful stop!
It is protected by a very narrow channel. The lake itself is very shallow, mostly less than 20ft (6m) deep. There is a large coral balmy in the middle of the bay. The warm, calm and protected bay make a perfect situation for the elusive Mandarin Fish.
Due to shallow depths, your dive times can be very long, which is great because the fish are shy, but beautifully bright like the rainbow! If you extremely lucky you can see the very rare mating because this is one of the best locations for them.
Equipment: Just like any dive site, bring or rent your gear as needed.
Updated Mar 13, 2010
[From a post of mine in the forums]
The currents while I was in Palau were not that strong. With fins, it was manageable. But for the first few minutes you are in the water, keep an eye on the coast and get a gauge for current movements.
The animals in Palau or the ocean in general are harmless. They are much more apprehensive of you than you would be of them. I did see a few sharks, but they kept their distance and ran off quickly. The fish were rather indifferent to us. Just watch out for the critters that do not offer forgiveness. The coral is sharp, the anemones sting and the urchins are not fun. These will only be an issue if you go in/out in shallow reef areas.
I do not see that if you have your own boat/kayak, that you would be restricted from any islands. Often when we were coming back from out dives, we would simply beach at the nearest island when the clock struck lunchtime.
As for hiking, the islands are extremely thick with vegetation. Unless it is a designated path, you will be hard pressed to make comfortable progress through the bush. There are several WWII bunkers along the waterline that are hidden by the tree canopies. You can visit some of them, but I do not know what the likelihood is for you to come in contact with any left over ordinances if you go off the beaten path from there.
Updated May 3, 2009
Website: http://www.visit-palau.com/aboutpalau/DivingTips.htm
I did not do a liveaboard from Palau, but I did all my dives as single day trips (one week in total). The waters around Palau were very calm and only had 2~3ft swells at maximum when I was visiting. If you are on a larger boat, 3 ft swells are barely noticeable.
However, if you are on a liveaboard, you will most definitely go farther into the deep blue and waves could be much larger. Other liveaboards I've done in the area were similar (2~3ft near the islands) and ~6ft in the open waters.
Updated Oct 27, 2009
I'm a diver and have visited Palau.
I've visited Jelly Fish Lake. That was truly unique. It does not matter if you are a diver or not, scuba is simply not allowed there (for a number of reasons).
While most avid divers who want to do wrecks will back up a trip to Palau with visit to Truk for the scuttled Japanese fleet, Palau still offers a handful of wrecks.
While most divers will hit Truk for the wrecks and Palau for the reefs, don't let this dissuade you. If weather, current or other factors limit the reef diving, the shallow wrecks are the next sought after sites.
The reason for this is that Palau's wrecks are typically very shallow and do not take full advantage of scuba's potential. But they are perfect for snorkeling. A few are right at surface and even break the surface if tides are low. However none are available directly from shore, so you will need to get a dive shop to give you a ride out by boat.
Equipment: Equipment can be rented if needed.
Written Feb 28, 2010
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