Fiji is tiny cluster of islands about 3,600 km east of Australia. With a population of fewer than a million people scattered across some 300 islands, it is sometimes considered the South Pacific ideal, offering secluded beaches, crystal-clear waters and a relaxed lifestyle that beckons to visitors from around the world. In the last two weeks, that image has been shattered. Disgruntled Fijians have taken the prime minister hostage, seized the Parliament and demanded a new constitution. The president has agreed to their demands. The trouble in paradise threatens to ripple throughout the region and beyond.

The coup began May 19, when nationalists led by Mr. George Speight, took over the Parliament and the Cabinet. They demanded the resignation of Prime Minister Mahendra Chaudhry and his government, as well as a new constitution that would ensure second-class status for all nonnative Fijians. Last Saturday, after a week of haggling and gradually escalating demands, the country's president, Ratu Sir Kamisese Mara, dismissed the government and appointed a caretaker administration. That flies in the face of condemnation by the British Commonwealth, Australia, New Zealand, Japan, the United Nations and the United States. Conceding to terrorism -- for that is the only word for this act -- and the willingness to institutionalize discrimination against nearly half of Fiji's citizens are both shameful and dangerous.

Bucolic image aside, Fiji has basic problems. Ethnic Indians, many of whom were brought over as indentured servants when Fiji was a British colony, make up 44 percent of the population; they control much of the economy, however. Indigenous Fijians account for 51 percent of the population, but they feel increasingly marginalized in the economy. Mounting frustration has resulted in periodic outbreaks of violence that target the Indian business community.