The US state department has said the Uighurs cannot be returned to China, despite requests from Beijing that they be handed over, because of fears they will face persecution and possible execution.
Instead US officials have been trying to find a third country willing to take them in, but in the meantime they have been kept in Guantanamo, spending up to 22 hours a day locked in their cells.
Population: About 21,000
Land area: 459km square
Located 800km east of the Philippines, 3,200km south of Tokyo
Independent nation since October 1, 1994 Previously ruled by Spain, Germany, Japan, and as a UN trusteeship administered by the US
Main income earners: Tourism, fishing, subsistence farming, US aid
In 2006 Albania agreed to accept five Uighur detainees from Guantanamo, but has said it will not take others due to fears of possible diplomatic repercussions from China, one of its main trading partners and investors.
Germany had been considered a possible destination as it has a large Uighur community, but no agreement was reached.
Last month two US congressmen called for the Uighur men to be allowed to resettle within the Uighur community in the US, saying that their continued detention without trial and after being cleared of any wrongdoing was an injustice.
However, that call was met with fierce opposition from other members of congress.
Earlier this month Hillary Clinton, the US secretary of state, formally asked Palau to accept some or all of the detainees.
In a statement on Wednesday Toribiong, the Palau president, said his country was "honoured and proud that the United States has asked Palau to assist with such a critical task".
"Palau's accommodation to accept the temporary resettlement of these detainees is a humanitarian gesture intended to help them be freed of any further unnecessary incarceration and to restart their lives in as normal a fashion as possible," he said.
Toribiong said Palau officials would travel to review the situation at Guantanamo Bay, which Barack Obama, the US president, has said he intends to close.
Palau, with a population estimated at about 21,000 is one of the world's smallest and youngest countries having gained its independence in October 1994.
Prior to that date it was governed as a United Nations trusteeship administered by the US, which remains responsible for Palau's defence and the country's principal source of aid.
The country, made up of eight main islands and dozens of smaller islets, is located 800km east of the Philippines and 3,200km south of Tokyo.
Palau is one of a handful of countries that does not recognise China and maintains diplomatic relations with Taiwan.
The Uighur detainees were captured by US forces mainly in Pakistan and Afghanistan during the war in Afghanistan following the September 11, 2001, attacks.
Uighurs are mostly Turkic-speaking and Muslim, and many say they have long been repressed by the Chinese government.
China says Uighur nationalists are leading a separatist movement in the country's western Xinjiang region and are responsible for a series of terrorist attacks.