a sea of pale jade?

[iemmahu]

"Perched on a huge granite boulder and extending over the crystal-clear water of the Great Barrier Reef, the villa had louvred glass giving on to a spectacular view of island peaks separated by a sea of pale jade."

Is it saying those island peaks are separated by pale jade water?

[bhaisahab]

"Perched on a huge granite boulder and extending over the crystal-clear water of the Great Barrier Reef, the villa had louvred glass giving on to a spectacular view of island peaks separated by a sea of pale jade."

Is it saying those island peaks are separated by pale jade water?

Yes, it's saying that the island peaks are separated by water which is the colour of pale jade.