Tourists to the Kuna Yala region take the opportunity to purchase molas, beautiful hand-woven coloured squares of cotton that are the most popular take-home souvenir. — Rick Sammon, AP

This Central American country has two big reasons to celebrate this year: 100 years ago Panama got its independence from Columbia and became a republic; and Panama City, along with Curitiba, Brazil, has been named the American Capital of Culture. What better time to explore the top 10 things to see and do in this bustling city. - PANAMA CANAL Number one on the list of most sightseers is the 80-km-long canal, which stretches from Panama City on the Pacific coast to Colon in the Caribbean. This engineering marvel, which took 75,000 workers 10 years to build, opened to maritime traffic on Aug. 15, 1914. The best place to watch vessels transiting the canal is at the Miraflores Locks, 12 km from the city centre.

- CASCO VIEJO There are more things to see and do in this colonial district, also known as San Felipe, than in any other part of the city -- and you can explore it all on foot. There are three museums, four churches (including one where Simon Bolivar once held a political meeting), a cathedral, monuments, the restored national theatre, the presidential palace, and tree-filled parks and plazas.

- OLD PANAMA (PANAMA VIEJO) Founded by Pedrarias Davila on Aug. 15, 1519, this was the first city the Spanish built. Henry Morgan looted the town before it was destroyed by fire in 1617. Stone ruins remain of more than 23 structures including wishing wells, royal houses, convents, a hospital, a town hall and the cathedral. Don't miss the on-site museum.

- MOLAS You haven't been to Panama if you haven't seen a mola. Nothing symbolizes the country's handicrafts industry more than these brightly-coloured panels made and worn by Cuna Indian women. Hand-sewn with tiny stitches, this multi-layered applique textile features stylized figures, animals or elaborate designs. A typical mola, which may take several days to make, sells for about $15 Cdn. Check out the selection at the IPAT building in Old Panama.

- RED DEVILS One way to explore the capital is on a tour, which costs between $70 and $125 Cdn. More exciting and less expensive is to make your own way around using local buses, the "diablos rojos" (red devils), which cost only 25 cents! Experience a slice of local life aboard these brightly-painted former U.S. school buses equipped with powerful speakers that blare the latest salsa tunes.

- PARQUE NATURAL METROPOLITANO Not far from the gleaming skyscrapers of Panama City's banking district is a 265-hectare tropical forest, home to titi monkeys, anteaters, sloths, deer, iguanas, and more than 200 species of birds. Walk one of three short trails or a take three-hour guided tour ($3 Cdn) and get a magnificent view of the city from the 150-metre high lookout point.

- TINAJAS RESTAURANT This is the place to enjoy a traditional Panamanian meal and see one of the best folkloric shows in the city. A sample dish from the menu: Pastel de Yuca (yucca country pie with chicken, corn, capers and raisins). Entertainment combines traditional dancing, music and frequent costume changes making this a lively affair. A bit noisy and crowded, but worth the admission.

- ISLA TABOGA No wonder Taboga is a popular weekend retreat for residents of Panama City. Just one hour away by boat, it offers tranquil surroundings, great beaches, snorkelling and forest trails. While on this "Island of flowers," so named for the innumerable fragrant blossoms, you can visit caves, a house of shells, an old church, and a pelican colony. The island, settled by the Spanish in 1524, was once visited by the French painter, Paul Gaugin who liked it so much he considered buying land here.

- BRIDGE OF THE AMERICAS This graceful suspension bridge,which spans 1,653 metres, symbolizes the route between the two oceans and the union between Central and South America. It is also the escape route for city dwellers who head for the beaches and mountains on the weekends. Opened on Oct. 12, 1962, Spanish Heritage Day, it's located at the Pacific entrance to the Panama Canal.

Holland America's MS Statendam makes its way through the Panama Canal. -- Rick Sammon, AP

- MI PUEBLITO This replica of a small interior town at the turn of the century has a cobblestone plaza surrounded by shops, a school, government offices, and a church. Recent additions include replicas of an Afro-Antillean village and dwellings of the Cuna and Choco Indians. You'll also find a museum devoted to the "pollera," Panama's national dress, and folkloric shows, which are staged every Thursday.