The Panama Canal bisects the country just to the west of Panama City, which enjoys excellent views of the monumental waterway. Between the canal and the rain forest that covers its islands, banks, and adjacent national parks, there is enough to see and do to fill several days.
Central Panama stretches out from the canal across three provinces and into two oceans to comprise everything from the mountains of the Cordillera Central to the west, to the Caribbean coral reefs and colonial fortresses in the north, to the beaches of the Pearl Islands in the Bahía de Panamá (Bay of Panama) in the south. Most of this region can be visited on day trips from Panama City, but the hotels in gorgeous natural settings outside the city will make you want to do some overnights. You could easily limit your entire vacation to Central Panama; the region holds most of the nation's history and nearly all the things that draw people to the country—beaches, reefs, islands, mountains, rain forests, indigenous cultures, and, of course, the Panama Canal. Within hours of Panama City, in many cases a fraction of an hour, you can enjoy bird-watching, sportfishing, hiking, golf, scuba diving, white-water rafting, horseback riding, whale watching, or lazing on a palm-lined beach.
The Panama Canal can be explored from Panama City, Gamboa, or Colón, and its attractions range from the wildlife of Barro Colorado Island to the feisty peacock bass that abound in Gatún Lake. The coast on either side of the canal's Caribbean entrance offers the remains of colonial fortresses hemmed by jungle, half a dozen beaches, and mile upon mile of coral reef, most of it between one and two hours from Panama City. The mountains to the east of the canal hold flora and fauna that you won't find in the forests that flank it, plus there are indigenous Emberá villages and a white-water rafting route on the Chagres River. The Pacific islands offer idyllic beaches, sportfishing, decent dive sites, and seasonal whale watching, all within 90 minutes of the capital by boat or plane. The coast to the southwest of Panama City also has some nice beaches, whereas the nearby highland refuge of El Valle presents exuberant landscapes populated by a multitude of birds and an ample selection of outdoor activities.