Yesterday evening the President of the Balearics, Jose Ramon Bauza, held talks with Rajoy at the hotel as the foreign ministers began to arrive for the conference which began yesterday evening and will continue today, as will the protests.
Britain is not taking part in the talks as it is not a member of the so-called Reflection on Europe Group which was created by the German foreign minister Guido Westerwelle who owns a property on the island and held the conference here last year.
The corruption allegations coincide with Spain's worst economic crisis for decades, with record unemployment and many Spaniards struggling to make ends meet.
The PP's former treasurer, Luis Barcenas, is in custody facing trial for corruption and tax fraud.
He denies the allegations.
He says he made numerous bonus payments - in cash - to Rajoy and other senior party members, out of the party slush fund of illegal donations by businesses.
Ledgers detailing such payments, and apparently written by Barcenas, have been published in two Spanish newspapers .
Rajoy and other PP members have repeatedly denied that they received illegal payments.
The prime minister has accused Barcenas of blackmail.
For now at least there is no sign that Rajoy might resign over the scandal because the PP has a comfortable majority in parliament.