Ultra-thin palladium films deposited on the Ni(111) surface were characterized by X-ray photoelectron spectroscopy (XPS), lowenergy electron diffraction (LEED) and X-ray photoelectron diffraction (XPD). For low coverage, LEED shows a (1 x 1) pattern similar to that of the substrate. For intermediate coverage, the LEED pattern displays extra spots around the main (1 x 1) spots, resembling a Moire coincidence pattern, probably associated with the formation of Pd bi-dimensional islands oriented in different directions on the Ni(111) surface. The results obtained by XPS and XPD corroborate this finding. The LEED pattern displays this structure up to 500 degrees C. Annealing at 650 degrees C brings back the (1 x 1) pattern, which is associated with a Pd island coalescence and alloy formation by Pd diffusion in the first atomic layers of the Ni(111). In this paper we present a detailed study of this surface structure via a comparison between XPD experiment and theory. (c) 2006 Elsevier B.V. All rights reserved.