  We report on optical and RXTE observations of a new high-latitude bursting
X-ray transient, XTE J2123-058. We identified the optical counterpart, measured
the 5.9573 hr orbital period and constrained the binary inclination and the
source distance. The distance lower limit indicates that the source is at least
2.6 kpc from the Galactic plane, which is unusual for an LMXB. RXTE
observations were made between June and August 1998 during the first detected
outburst from this source. We describe correlations between X-ray timing and
spectral properties and discuss the possibility that the propeller mechanism
turned on during the decay of the outburst. During one of the RXTE
observations, we detect a pair of high frequency QPOs at 847.1 +/- 5.5 Hz and
1102 +/- 13 Hz simultaneously. According to the beat frequency model, the QPO
separation implies a neutron star spin period near 3.9 ms. As the X-ray flux
decreases at the end of the outburst, the amplitude of the optical modulation
increases significantly. This behavior can be explained if the size of the
accretion disk decreases during the decay of the outburst.
