An illegal Chinese fishing vessel and its 28 crew have been detained in Palau, authorities said, creating a delicate diplomatic situation for the tiny Pacific nation, which is allied with Beijing's rival Taiwan.

The boat was intercepted by a patrol boat at Helen Reef, in Palau's territorial waters, and escorted to the main island of Koror, the Division of Marine Law and Enforcement (DMLE) said.

"They did have sea cucumber on there... it's estimated about 500 pounds (225 kilograms)," DMLE director Victor Remengesau told reporters on Monday.

He said the Chinese fishermen and 19 crew from the patrol boat that caught them were undergoing 14 days quarantine in Palau, which is one of the few places in the world that remains free of Covid-19.

Remengesau, the brother of Palau President Tommy Remengesau, said it had not yet been decided whether to charge the fishermen, who are believed to be from southern China's Hainan province.

"That's one of the things that we're discussing," he said.

"We've been told we don't want them to be here any longer than they have to be."

Palau, long regarded as a pioneer in marine conservation, has banned foreign commercial fishing vessels from its waters.

The tiny nation of about 18,000 is one of Taiwan's four remaining allies in the Pacific and only 15 worldwide.

China, which sees Taiwan as part of its territory, has shown its displeasure at Palau's diplomatic links in the past, implementing an unofficial tourism boycott in 2018.

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