"Oh, yeah, I've been there. It's a pristine natural ice spring. And I usually don't use the word 'pristine'. It's one of nature's wonders."
— Aang to Katara about the Misty Palms Oasis' former glory.
The Misty Palms Oasis is a small village located on the southwestern edge of the Si Wong Desert. Hosting a seedy cantina crowded with traders, soldiers, and wanderers of the Si Wong Desert, it is also frequented by sandbenders and beetle-headed merchants. This is the final stop to rest and buy or trade anything before venturing into the desert. As such, travelers often stop in this village to stock up on supplies.
Before the Hundred Year War, the Misty Palms Oasis was an icy, refreshing spring. However, as time passed, the spring gradually melted away and the oasis was converted into a rest stop.
Before making plans to find information about the Fire Nation, Team Avatar decided to take "mini-vacations". For hers, Katara chose to visit the Misty Palms Oasis, as it sounded refreshing. Aang then stated that he had been to its "pristine natural ice spring" once before, commenting that it was "one of nature's wonders". However, much to their disappointment, the oasis had deteriorated into little more than a rest stop for tourists, with the ice spring almost entirely melted away.
Several days later, Zuko and Iroh met up with Fung, a member of the Order of the White Lotus, within the cantina and had a run-in with bounty hunter Xin Fu and earthbending instructor Master Yu. They were able to avoid capture by initiating a bar fight. They then went to a neighboring flower shop where, in the back room, Fung helped Iroh make the arrangements for him and Zuko to go to Ba Sing Se.
The cantina's trademark is its selection of frozen beverages, served by its skilled bartender who dices fruit with dual katanas. The ice is carved from a subterranean iceberg just outside the pub at the center of the oasis, which for the most part is still preserved beneath the hot desert sand. According to Avatar Aang, the iceberg was once one of the world's natural wonders, but after one hundred years, the iceberg became part of the surrounding cantina and was cut down due to the high demand for the frozen drinks.