The capital, 450-year-old Asuncion merits a stay of two leisurely nights—that way, you'll have time to sit in the main square and people-watch. The shopping in this city is the best the country offers, and the cathedral and archaeological museum are both highlights. The governmental architecture is interesting: Don't miss the Congressional Palace, Customs House and Government Palace (in the style of the Louvre in Paris). You'll find great views of the city from the restaurant on the top floor of the Guarani Hotel (at night, you can see the lights from Clorinda, Argentina, across the river). The Plaza de los Heroes, where you'll see the Tomb of the Unknown Soldier, has been renovated to accommodate an underground parking lot and shops. At ground level, the water garden is worth seeing. The plaza is also a good place for people-watching (a lot of them will be drinking terere, a popular local drink, at outdoor cafes) and for shopping for local handicrafts at outdoor artisan stalls. And be sure to visit one of the parrilladas (barbecue-and-steak restaurants featuring local entertainment).

The Botanical Gardens make a good break from the bustling downtown. It has more than 100 species of tropical plants and trees and a small museum with an interesting insect collection. (Bypass the zoo.) There are some pleasant parks, and the national cemetery is a local curiosity: Its tombs, in a variety of architectural styles, are laid out like a miniature city. Be sure also to take a cruise on the Paraguay River: This scenic three-hour trip is quite relaxing.

The nearby town of Itagua (20 mi/30 km) is famous for nanduti (spider-web) lace and is a good example of a Guarani Jesuit settlement. Capiata (12 mi/20 km from town) is a center of the broom industry. It's worth the trip to see the oldest Franciscan cathedral in Paraguay and the small Folklore Museum, which explains the myths and legends of Paraguay. A bit farther away (30 mi/50 km), on Lake Ypacarai, is San Bernadino, a fashionable summer playground for Asuncion's affluent. Casinos, boating and restaurants are the principal attractions—some good concerts are held in the outdoor amphitheater. Asuncion is 175 mi/280 km northwest of Encarnacion.

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