  We argue that from observations alone, only the transverse power spectrum
$C_\ell(z_1,z_2)$ and the corresponding correlation function
$\xi(\theta,z_1,z_2)$ can be measured and that these contain the full three
dimensional information. We determine the two point galaxy correlation function
at linear order in perturbation theory. Redshift space distortions are taken
into account for arbitrary angular and redshift separations. We discuss the
shape of the longitudinal and the transversal correlation functions which are
very different from each other and from their real space counterpart. We then
go on and suggest how to measure both, the Hubble parameter, $H(z)$, and the
angular diameter distance, $D_A(z)$, separately from these correlation
functions and perform an Alcock-Paczynski test.
