  We have performed ab initio density functional calculations of thin Ag films
on the Pd(111) surface. We have calculated the structural properties and the
electronic bands of the Ag/Pd systems. There is a band gap in the electronic
density of states around the centre of the two-dimensional Brillouin zone of
the Pd(111) surface, which makes possible the formation of localised states in
the adsorbed silver films. We find that quantum well states may form at binding
energies around 4 eV.
