Abstract The CANGAROO (Collaboration of Australia and Nippon for A Gamma-Ray Observatory

consists of four 10m-diameter imaging atmospheric Cherenkov telescopes arranged in diamond shape with 100 m interval. The reflector of CANGAROO-III is a tessellated parabola with 114 FRP (Fiber Reinforced Plastic) spherical mirror segments. By elaborate performance test and optimization of the arrangement of segments, optical quality of the telescopes was significantly improved for newer telescopes. A newly introduced alignment system also largely reduced the required time and work force, and it makes regular re-alignment possible to maintain optical quality of the telescopes. The total performance of this stereoscopic system and analysis method for shower reconstruction were tested by the observation of the Crab nebula. Two points on the galactic plane, (l, b) =(−19 ◦.5, 0 ◦)and(+13 ◦.0, 0 ◦ ) were observed with the CANGAROO-III stereoscopic system in 2004 June and August with energy threshold of 600 GeV. Some analysis methods for this extended source were tried. These data were analyzed in two ways: (1) Search of the diffuse component associated with the galactic plane, and (2) Survey of point source within the field of view. The latter analysis was performe