On the waterfront in Port Stanley, the two monuments to the world wars have been joined by a third. The Liberation Statue - built by islanders in tribute to the 250 British soldiers who died in the 1982 Falklands war - is today the most poignant symbol of island feeling.
The majority of islanders remain traumatized by the memory of April 2, 1982, the day their peaceful community was turned upside down by an Argentine invasion that escalated into an intense 105-day war with Britain over which country should rule the islands.
Britain won the war, and the islanders have begun to put their lives back together.
Some have gained a measure of respect for Argentina's new democratic government led by Raul Alfonsin. But many remain suspicious of the one-time invader, just 400 miles away.
''When you've been forced to look down the barrel of a gun, you are in no hurry to shake hands,'' says Velmer Malcolm, owner of Stanley's Roe Hotel, one of the town's most popular nightspots.
Mrs. Malcolm remembers the day she was arrested by the Argentine troops and deported to an isolated region of the islands for ''security reasons.'' She suddenly found herself fearing for her life.
It is difficult to find anyone on this island of 1,800 people who does not have a story to tell about the suffering of the war. Only three local residents were killed - accidental deaths caused by British, not Argentine, shelling. But sheep were destroyed, fences torn down, houses burned. One farmer's horses and pigs were hacked to death.
Bad feelings toward the Argentines were heightened by Argentina's insistance that the kelpers change some of their habits, including driving on the left side of the road.
The most bitter legacy of the occupation is the estimated 19,000 Argentine mines, set in 1982 without detector rings, that cannot be defused.
The islanders' reluctance to contemplate accommodation with Buenos Aires on which nation should have sovereignty over them is fueled by suspicions about the fragile nature of Argentine politics.
Tuning in to the BBC on a regular basis, Falklanders hear about Argentina's spiraling inflation and the continuing government problems over military and human rights issues. The islanders suspect that President Alfonsin's government could fall in a coup.
''If Alfonsin managed to hold out, then things might be different. But for the moment, we just think of the military and what guarantee of a future is that?'' asks Stuart Wallace, a local engineer and one of the few islanders married to an Argentine.
Many islanders are also angry about what they perceive as continuing Argentine reluctance to bear in mind their opinions in negotiating the future of the Falklands with Britain.
Argentina maintains that residents of the islands, which it calls the Malvinas, have no role in determining the future of the territory. But it says that under Argentine rule, islanders could continue schooling in English and maintain British traditions.
The first official postwar talks between Argentina and Britain broke down in July.
Any softening of attitudes toward Argentina seems implausible, given the fish-bowl nature of island politics. Everybody knows everybody else and there is no toleration for anything other than anti-Argentine sentiment on the issue of sovereignty. Alec Betts, who dared to speak out publicly in favor of Argentina, was virtually branded as a traitor and in effect forced into self-exile in Argentina.
By contrast, relations between the islanders and the estimated 4,000 British troops here are generally good. The gradual troop reduction (there were more than 8,000 just after the surrender of Port Stanley) has eased tensions and ushered in a new chapter in civilian-military relations. Troops are no longer billeted in the homes of islanders; they live in barracks outside Stanley and other points.
A hearts-and-minds campaign, carefully organized by the new military commander on the islands, Maj. Peter de la Billiere, ensures that military contact with residents is primarily beneficial to the islanders.
Children are taken for free helicopter rides. Troop patrols volunteer information to farmers about the location of lost sheep. And the Stanley political establishment is regularly entertained with parties given by senior officers.
Islanders are also benefiting economically from the troops' presence. Young Simon Powell has opened a mutton-burger shop and bakery, which are popular with British soldiers. Another Englishman has opened a brewery, selling ''penguin beer.''
Major de la Billiere, who is a former director of the British Special Air Services, said in a recent interview with this writer that in all his other assignments, which include duty in Northern Ireland, he never felt so assured of the loyalty of the local community as here in the Falklands.
Just how long this loyalty will maintain itself remains to be seen. Already some islanders are beginning to feel confused about the real motives behind British government policy.
London is trying to revamp the islands' government by bringing in outsiders picked for their efficiency, rather than for any emotional attachment to the Falklands.
Islanders have generally welcomed the construction of a new airport (due to be ready for use by medium- and long-haul planes by next April) as a visible sign that Prime Minister Margaret Thatcher is committed to keeping the islands British. Few residents question the cost (more than (STR)215 billion ($264 billion)) or its strategic implications.
In Buenos Aires, some diplomats worry that the new airport will convert the islands into a virtual floating aircraft carrier for rapid troop deployment, thus making it a target for the Soviet Union in any potential war. But most islanders seem to view the sophisticated defense system as the best insurance against another invasion.
There are some Falkland residents who worry about the disproportionate size of military spending compared to economic development.
The British Defense Ministry has approved more than (STR)3 billion for the replacement of equipment lost or destroyed during the war and for the maintenance of the garrison here between 1982 and 1987.
Only (STR)30 million has been funneled into improving agricultural productivity and starting up limited industrial activity. Some of these funds are starting a small woolen mill and an onshore fish reprocessing plant, ventures that together will create only about 20 jobs.
But islanders have been told the payoff will come in exports of woolens and king crabs that bear the now well-known Falklands name.
''We are not expecting ... mass investment in the future,'' cautions Simon Armstrong, the British general manager of the Falkland Island Development Corporation. ''The best we can hope for is to get some islanders back,'' he says , referring to those who left the islands during the war.
Last year some 30 islanders who had fled in wartime returned. And there are 40 new British immigrants, some of whom have opened up new businesses.
Some Falklanders also wonder why London isn't focusing more attention on a need for teachers and for a hospital to replace the one that burned down six months ago. (There is now just a temporary facility, a wood building that some consider to be even more of a fire risk than the hospital that burned.)
''The British are letting these islands slowly die again,'' commented a local doctor, a comment that oversimplifies a complex issue but is nonetheless in the minds of many.
In London, Foreign Office officials admit privately that whatever may have been the commitment shown during the war, any major economic progress would most likely have to await a rapprochement between Britain and Argentina.
In the meantime, the few roads are in a state of disrepair and water and electricity supplies are limited.
And, making the predicament here still seem so intractable are Britain's continuing official commitment to the wishes of the islanders and the Argentines' refusal to admit those wishes are relevant.