Palau was founded in 800 as a modest dock for connections with the islands of the La Maddalena archipelago and is now a port for communication with the islands, as well as a recreation centre.
From Colle di Baragge, behind the town, you can enjoy a wonderful view: you can spot Porto Raphael, Punta Sea and Punta Sardegna a Mare and Porto Pollo, with the Liscia beach, divided into two parts by the Isola dei Gabbiani, joined to the mainland by a slim sandbar, and the Cala di Trana, one of the most isolated beaches of the coast. On the opposite side of Palau to the east is the famous roccia dell'Orso (bear rock), a craggy hill so called because of the presence of a giant granite rock carved by the winds and the humidity into the particular form of a bear, so much so that it resembles a bear even close up, in a dominant position over the archipelago.