President Lazarus Salii was found shot to death in his home Saturday, the second president in a row to die by gunfire in this tiny, isolated Pacific island chain that has been split by a dispute over a proposed self-governance agreement with the United States.

It was not immediately known if Salii, 54, had killed himself or was shot by an unknown assailant. Police Officer Theodore Obak at first said an unknown gunman had fired the shot, but a government spokesman said later that a gun was found and suicide had not been ruled out.Vice President Thomas Remengesau Sr., who also was Palau's minister of justice, was sworn in as the new president. Remengesau, 57, will serve out the remainder of Salii's term, which ends later this year.

Palau, about 4,500 miles southwest of Hawaii and 600 miles east of the Philippines, has been beset by economic and political problems. The chain, with a population of 15,000, has been administered by the United States since the end of World War II.

Salii was elected in August 1985 to succeed Haruo Remeliik, the country's first elected president, who was gunned down outside his home two months earlier.

Bonifacio Basilius, a special assistant to the president, said Salii was sitting alone in his house while his wife, driver and maid were eating lunch outside.

The three heard what they thought was a shot about 1:30 p.m. The driver checked the grounds of the house and found nothing unusual.