  We present high resolution VLT UVES and low resolution FORS optical
spectroscopy of supernova 2006aj and its host galaxy, associated with the
nearby (z = 0.03342) gamma-ray burst GRB 060218. This host galaxy is a unique
case, as it is one of the few nearby GRB host galaxies known, and it is only
the second time high resolution spectra have been taken of a nearby GRB host
galaxy (after GRB 980425). The resolution, wavelength range and S/N of the UVES
spectrum combined with low resolution FORS spectra allow a detailed analysis of
the circumburst and host galaxy environments. We analyse the emission and
absorption lines in the spectrum, combining the high resolution UVES spectrum
with low resolution FORS spectra and find the metallicity and chemical
abundances in the host. We probe the geometry of the host by studying the
emission line profiles. Our spectral analysis shows that the star forming
region in the host is metal poor with 12 + log(O/H) = 7.54 (+0.17, -0.10)
(~0.07 Z_sun), placing it among the most metal deficient subset of
emission-line galaxies. It is also the lowest metallicity found so far for a
GRB host from an emission-line analysis. Given the stellar mass of the galaxy
of ~10^7 M_sun and the SFR (H alpha) = 0.065 +/- 0.005 M_sun/yr, the high
specific star formation rate indicates an age for the galaxy of less than ~200
Myr. The brightest emission lines are clearly asymmetric and are well fit by
two Gaussian components separated by ~22$ km/s. We detect two discrete Na I and
Ca II absorption components at the same redshifts as the emission components.
We tentatively interpret the two components as arising from two different
starforming regions in the host, but high resolution imaging is necessary to
confirm this.
