Palau is among 12 nations that still recognise Taiwan's claim to statehood, after China convinced others to sever diplomatic relations with Taipei in favour of Beijing.

Lai's Pacific tour, which has included two stops on US soil, has drawn a barrage of criticism from China, which claims Taiwan as part of its territory and opposes any international recognition of the island.

Lai arrived in Palau on Thursday after visiting the American territory Guam where he spoke with Republican US House Speaker Mike Johnson -- the highest-level US contact the Taiwanese leader has had during his week-long trip.

China bristles at any official contact between Taipei and Washington, which is Taiwan's most important backer and bigger arms supplier.

A 2022 visit to Taiwan by then US House speaker Nancy Pelosi prompted China to launch military drills around the self-ruled island.

Beijing on Thursday urged the United States to "stop sending wrong signals" following the Lai-Johnson call, warning of the "serious danger that separatist acts of Taiwan independence pose to peace and security across the Taiwan Strait".

Taiwan faces the constant threat of a military attack by China, which regularly deploys fighter jets and warships around the island to press its claims, and Beijing has not ruled out using force to bring the island under its control.

On Friday, Lai and his Palau counterpart Surangel Whipps Jr watched a joint rescue exercise involving the 4,000-tonne Yunlin, Taiwan's largest coast guard patrol ship in service, and two vessels donated by Taiwan to Palau.

As part of the drill, several people were plucked from the water and brought for treatment to the Yunlin, which is equipped with an operating room, X-ray machine and other medical equipment.

Earlier, Lai attended a ribbon-cutting ceremony for a new "one-stop" government services building in Palau that Taiwan helped fund.

Lai hailed the building project "a model of successful bilateral cooperation" and said the Taiwan-Palau alliance was "rock solid".

China and Taiwan have been governed separately since 1949, when Chiang Kai-shek's nationalist forces were defeated by Mao Zedong's communist fighters and fled to the island.

In his first public speech of the trip in the US state of Hawaii, Lai said Saturday there was a need to "fight together to prevent war", warning there were "no winners" from conflict.

From Palau, Lai will fly to Taipei on Friday, wrapping up a trip that also included visits to Taiwan's other Pacific island allies the Marshall Islands and Tuvalu.

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