As I trundled into the capital Valletta on the No 8 airport bus (a charming old rattler like most of Malta's vintage buses). the all sunny golden facades of the stone houses reminded me of home. So did the nameplates declaring their owner's links to Perth, Rosebud or Folkestone. And I knew the landlady I was about to meet at my guesthouse liked Australians because she told me so when I rang to book a fortnight earlier. So, for starters, you feel relaxed and welcome in Malta, and that can't be said about every place you visit.

Then when I arrived at Asti Guest House, a 350-year-old former convent towering over steep, cobbled St Ursula Street, I couldn't help smiling. It was one of the prettiest streets I have ever seen. A little later, standing on my fourth-floor juliet balcony and peering down the cobbles to Ta' Gesu (Of Jesus) church, I smiled again to think that this view had existed long before Australia was even known.

As you soon discover, in Malta it's not so much a case of trying to crack a foreign culture, as trying not to yield too easily to its charms.

The next day, returning home after hours of delighted exploring, I succumbed. Two young boys dressed as monks were distributing pamphlets near Ta' Gesu. They gave me one but it was written in Malti, the country's unique Semitic language spoken by few people aside from Malta's 380,000 residents - and their even larger expatriate ranks in Australia, Canada, the United States and Britain. Thankfully, almost everyone in Malta speaks good English and the boys explained there was a special religious service that evening.

It was almost six o'clock. Behind us Valletta's Grand Harbour flickered, and shimmered with that impossible Mediterranean blueness. It was late spring but a sharp wind was about so I went back to my room and monitored proceedings from the balcony. Big crowds began to gather near the corner with Triq San Gwann (St. John's Street), about 8 p.m., sublime music drifted up the hill and lured me back to the church.

Pretty girls, dressed in white lined the steps, flanked by monks and bishops and other fancy-dressed clerical types. A woman was trying to squeeze her child in front of me for a better view. As I stood back to oblige her, she smiled and thanked me. Gradually we got talking.

She explained that Malta's Roman Catholics had been urged at congregations the previous week to gather at Ta' Gesu to witness the Miraculous Jesus being paraded through the streets. This momentous event usually happens just once every 33 years. But the church leaders decreed the worsening situation in the Holy Land, particularly the siege at the Church of the Nativity in Bethlehem, in which several Maltese monks and nuns were among the hostages, warranted an extraordinary show of faith.

Hence the decision to display the Miraculous Jesus, so named because God is said to have sculpted the divine expression on Christ's face. The icon is miraculous for other reasons, too.

My new friend explained her daughter had been diagnosed with a brain tumour at three and had been expected to die. But the priest at Ta' Gesu had made representations on the family's behalf and their prayers had come true. The woman's eyes glistened as she smiled down at her healthy daughter.

The procession combined pomp, faith and solemnity in equal parts as it made its way up the narrow steps (built in 1566 and spaced so knights in armour could walk them comfortably), passing illuminated crucifixes at each street comer. It left camaraderie and goodwill in its wake, with people mingling excitedly. I had been here little more than a day and already was being embraced by complete strangers.

Faith is big in Malta. Christianity has been the driving religion since St Paul's shipwreck here in AD 60, even surviving the Arab conquest of Malta from AD 870 until 1090. Despite its tiny size - a jet can fly over Malta's islands in about three minutes - the archipelago boasts more than 360 churches. You will find yourself spending so much time admiring stained glass and frescoes that you will start to feel like a pilgrim.

St John's Co-Cathedral is the republic's most famous church and serves as a potent reminder of the two pillars that define this country - faith and history. It was built for the Knights of St John, Malta's former rulers, between 1573 and 1578. Today the cathedral floor is inlaid with the intricate marble tombstones of some 400 noble knights, each of whom had to prove his nobility back eight generations (German knights had to trace their noble lineage back 12 generations). Driven from Rhodes in the 16th century, the knights were granted sanctuary in Malta by Spain's Charles V, in exchange for two falcons a year - hence the term Maltese falcon.

Entering the cathedral you walk over the same inscription -'Who strides over me will one day be walked upon himself as the knights did centuries ago. There's a lovely eight pointed Maltese cross in the cathedral, each point representing one of the eight langues or languages that made up the order. The colour white represents the main role of the Knights Hospitallers to build hospitals; red is the blood inevitably shed when you are an order of Christian crusaders. Just ask the Turks.

For eight months in 1565 this island was under siege from Ottoman troops, among them the formidable Dragut Rais, infamous for kidnapping the entire 5000-strong population of Gozo, Malta's second island, and selling it into slavery. When things got dull during the Great Siege, the Muslim invaders crucified a. few knights and floated the bodies across Grand Harbour.

The knights' Grandmaster at the time, Jean Parisot de la Vallette (after whom the capital is named) devised an equally gruesome counter-attack. He stuck Turkish prisoners' heads in cannon and fired them back across the harbour. The knights, supported by some 8000 dogged Maltese citizens, eventually won the day.

If your imagination is willing, you can relive this depraved encounter today. Both Fort St Elmo and the knights' stronghold of Birgu (renamed Vittoriosa after the victory) still loom impressively above the Mediterranean. I spent one Sunday crawling over the warm stone of Fort St Angelo and found I had the whole place to myself, presumably because guidebooks warn intending visitors it's closed on Sundays. It's not; it's just there's no one to take your money so you get in for free.

The views from up here are superb; over the creek to Senglea or Ricasoli, or across the harbour to the. mirage of Valletta, Europe's oldest planned city (built in 1566) and World heritage to boot. Valletta is the most spectacular legacy of Malta's rich heritage. In 1880 Walter Scott stayed here and rhapsodised, "This splendid town, quite like a dream".

The city was constructed in I566 to populate the exposed left flank so successfully exploited by Muslims during the siege. Houses had to be several storeys tall and streets narrow to provide shade from the baking summer sun. Water was scarce so each rooftop was built to funnel rain to a well within the building, while the comers of each building were decorated with sculpture. And beneath all this baroque beauty was a subterranean network of tunnels and corridors so the knights could escape.

Casa Rocca Piccola has stood since that time, and tours offer a rare insight into the past life of Maltese nobility. Owned by the 9th Marquis de Piro and Baron of Budach, it has been in his family for almost two centuries and was the property of Knights before that.

There are sedan chairs, from the knights' days, a 16th-century sideboard said to be the oldest domestic furniture in Malta, a sterling silver set of doctor's instruments dating to the 17th century, and a 1720 map by Homann - the

first time Malta got its own page in an atlas, and the last time, apparently.

There is a well in the house - which dates from 1580. It most recently doubled as a bomb shelter during World War II, when Malta was again thrust into a starring role in the theatre of war, and acquitted itself admirably. (The country awarded Britain's highest honour, the George Cross, for its services.)

Today, Valletta swarms with cultural tour groups and locals going about their business. It's a friendly place, compact and welcoming. But Malta as a whole is battling with issues such as immigration, Europeans buying up land and industrial decline. Some of its citizens believe joining the European Union will assure their future; others fear EU membership will spell the end of a unique way of life and Malta's short-lived autonomy (it won independence from Britain only in 1964).

Whatever path the country takes, it will take a lot to alter Malta. It's got too much faith and history behind it. A history of faith, and a faith in history.

The temples themselves are unassuming, too; at first sight they look like a jumble of old stone ruins. But with a guide on hand to explain their significance you appreciate how the rounded shapes mimic those of fertility figures found here and at other ancient sites across the islands.

You can make out faint spiral carvings on rocks, signifying eternity. You can almost picture the blood of animal sacrifices dripping onto the altars, and appreciate the extraordinary skill that went into manoeuvring 50-tonne rocks to construct these phenomenal neolithic structures.

One theory - supported by the recent excavation of underwater ruins off Malta's coast - says the temples are part of the lost city of Atlantis. The site was excavated in the late 1820s by Colonel Otto Bayer of Germany, and a Mr. Ames Somerville (the latter was the Scottish grandfather of my guide Alfred Micallef Somerville, and the author of Malta's first dictionary.)

On Malta's islands you can walk over fossils that are millions of years old, visit the unique underground ossuary of the Hypogeum and explore many more ancient temples such as those at Tarxien and Mnajdra.