  We have discovered a ~1 Hz quasi-periodic oscillation (QPO) in the persistent
X-ray emission and during type I X-ray bursts of the globular cluster source,
dipper and low-mass X-ray binary (LMXB) 4U 1746-37. The QPO properties resemble
those of QPOs found recently in the LMXB dippers 4U 1323-62, and EXO 0748-676,
which makes 4U 1746-37 the third source known to exhibit this type of QPOs. We
present evidence for X-ray spectral changes in this source similar to those
observed in LMXBs referred to as atoll sources. We detect two states, a low
intensity and spectrally hard state, and a higher intensity and spectrally soft
state. This may explain the different spectral characteristics reported for 4U
1746-37 earlier. The high intensity state resembles the banana branch state of
atoll sources. The QPOs are only seen in the low intensity state, and are
absent when the source is in the banana branch. This strongly suggests that
either the accretion disk or an extended central source change shape between
the low intensity state and the banana branch. Twelve bursts were detected, of
which 5 took place while the source was on the banana branch and 7 when the
source was in the low intensity state. The bursts occurring on the banana
branch had an e-folding time ~3 times longer than those which occurred in the
low intensity state. Whereas previously detected dips showed only a decrease in
count rate of ~15%, we found in one observation a dip in which the count rate
dropped from ~200 counts per second to ~20 counts per second. This dip lasted
only ~250 seconds, during which clear spectral hardening occured. This is the
first time strong evidence for spectral changes during a dip are reported for
this source.
