We present the first measurements of the projected clustering and intrinsic alignments (IA) of galaxies observed by the Physics of the Accelerating Universe Survey (PAUS). With photometry in 40 narrow optical passbands ($450rm{nm}-850rm{nm}$), the quality of photometric redshift estimation is $sigma_{z} sim 0.01(1 + z)$ for galaxies in the $19,rm{deg}^{2}$ Canada-France-Hawaii Telescope Legacy Survey (CFHTLS) W3 field, allowing us to measure the projected 3D clustering and IA for flux-limited, faint galaxies ($i < 22.5$) out to $zsim0.8$. To measure two-point statistics, we developed, and tested with mock photometric redshift samples, `cloned random galaxy catalogues which can reproduce data selection functions in 3D and account for photometric redshift errors. In our fiducial colour-split analysis, we made robust null detections of IA for blue galaxies and tentative detections of radial alignments for red galaxies ($sim1-3sigma$), over scales of $0.1-18,h^{-1}rm{Mpc}$. The galaxy clustering correlation functions in the PAUS samples are comparable to their counterparts in a spectroscopic population from the Galaxy and Mass Assembly survey, modulo the impact of photometric redshift uncertainty which tends to flatten the blue galaxy correlation function, whilst steepening that of red galaxies. We investigate the sensitivity of our correlation function measurements to choices in the random catalogue creation and the galaxy pair-binning along the line of sight, in preparation for an optimised analysis over the full PAUS area.
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