Palace Square in Valletta is more often known as St George's Square, and isn't a very likely place for a sailor to hang out buying a paper (it's bare and formal). Paola Square is livelier. But I guess it could be either.

It was restrained of Tawney not to work "The Gut" (aka Strait Street) into his song. When I was there (around 2000, I think) it still had some faded remainders of its days as the entertainment district for the Navy. Some of the women looking out of upper floor windows could have been continuously in the same line of business since WW2 and there were bar signs advertising Watney's Red Barrel. We met two ex-Navy sailors in the street, probably in their 80s, who'd come back there to remember old times. There's a lot about it on the web.