Palau is an independent republic in the western Pacific Ocean, part of the island group of Micronesia. An archipelago of about 200 islands, Palau is situated near the equator about 850 km (about 500 mi) east of the Philippines. Palau became a self-governing nation in October 1994, when it entered into a Compact of Free Association with the United States. Koror, which covers the island of the same name, is the country's largest town and the provisional capital. A new capital is being built on the island of Babelthuap.