A Japanese airfield made the 10-kilometre (six-mile) long island a prized asset during the conflict, with the Americans determined to seize it at any cost.
The island -- about an hour's boat ride from the Palau capital Koror -- underwent months of aerial and naval bombardment before US marines launched an amphibious invasion in September 1944 that was expected to take just three days.
Instead, the assault dragged on for almost three months and became one of the bloodiest encounters in the Allied "island hopping" campaign, claiming about 13,000 Japanese and 3,000 American lives.
On the island today, reminders of the war are everywhere -- the wreckage of a Japanese Zero fighter rests against a tree with vines growing out of the cockpit and a US landing craft looms beside the road, a white star still faintly visible beneath layers of corrosion.
Down the road from the main jetty is the "1,000-man cave", a maze of tunnels that served as an underground Japanese field hospital -- one of 608 fortifications the defenders carved out of the rugged limestone terrain in a bid to repel the Americans.
Steve Ballinger, co-founder of British-registered charity Cleared Ground Demining, says 600 pieces of ordnance were removed from that cave alone in order for it to be declared safe.
Prior to it being cleared, tourists had visited the cave virtually daily, unaware they were sightseeing amid live land mines, hand grenades and mortars, not to mention human remains, which were repatriated to Japan.
"It's crazy really, the scale of contamination," Ballinger said, explaining that WWII-era ordnance had a 30 percent failure rate and the live shells and mines in Peleliu were simply left in place until the clean up began.
- Bombs in the backyard -
There were also huge weapons stockpiles in the honeycomb of Japanese caves. After the battle, the Americans simply dumped enemy bodies and ordnance into 30-metre deep sinkholes that pit the jungle floor.
Cleared Ground started the clean up in 2009 and since then has removed 32,000 items of live ordnance in Peleliu.
Fellow co-founder Cassandra McKeown said they did a survey of all houses on the island when the work began and found 26 percent of properties were contaminated with live ordnance.
"They had them in the backyard, they had live grenades in the school as part of a history project," she said.
"They were using them as doorstops, old ladies were using them to hammer nuts on, not realising they were dangerous. This one lady had one right next to a barbecue."
Cleared Ground has trained a team of 25 Palauans to help dispose of the dangerous items and boasts a 100 percent safety record, with no unplanned detonations during its demining work.
But Ballinger said practically everyone in Palau knew someone who had been killed by WWII ordnance, although accidents had become rarer since the late 1970s, when the government outlawed dynamite fishing, which could set off nearby ordnance.
He said many Palauans mistakenly believed the bombs were not dangerous because they had not detonated in 70 years, but their age actually increased the problem.
"They are getting old, they are deteriorating," he said.
"Some of this ordnance, once it gets exposed to air it can undergo a chemical change that makes it more dangerous."
He said the presence of so many explosives also hindered development on Peleliu because it made creating infrastructure such as roads and pipelines a hazardous exercise.
As a result, only about 400 people live on the island, even though it has world-class diving and abundant war relics for history buffs.
- Pacific-wide problem -
Andy Johns, who like Ballinger is a former bomb disposal expert with the British military, said the only place he had seen a greater concentration of ordnance was in Kuwait after the first Gulf War.
"There's no jungle in Kuwait though, it's nice and sandy, not like this," he said.
Peleliu's jungle is so thick, and the cave network created by the Japanese so extensive, that a group of Japanese went into hiding after the battle and staged guerilla attacks before finally surrendering in April 1947.
Adding an extra element of danger to an already hazardous job, saltwater crocodiles lurk in the mangroves where Japanese mines are often found.
The munitions are stored until a sufficient amount have been gathered then destroyed in controlled explosions either on an offshore sandbank or a remote site in the Koror hinterland.
Ballinger said Palau was not unique and there were high levels of ordnance on other Pacific nations that saw intense fighting during WWII, including Papua New Guinea and the Solomon Islands.
"It's the exact same problem in Tarawa, there's ordnance all over the reef," he said.
"We went to the Marshalls last year and there's people with bombs in their houses that they found 20 years ago and there was no ability to deal with it.
McKeown said Cleared Ground was keen to extend its work across the region but doing so was dependent on finding funding from donor nations for an issue she said had been largely forgotten by the wider world.
"Before we started, they'd been waiting for 70 years here for the Americans and Japanese to come back and help clean up," she said.