We study the deconfinement phase transition and monopole properties in a fi
nite temperature three-dimensional compact Abelian gauge model on the latti
ce. We predict the critical coupling as a function of the lattice size in a
simplified model to describe monopole binding. We demonstrate numerically
that monopoles are sensitive to the transition. In the deconfinement phase
the monopoles appear in the form of a dilute gas of magnetic dipoles. In th
e confinement phase both monopole density and string tension differ from se
miclassical estimates if monopole binding is neglected. However, an analysi
s of the monopole clusters shows that the relation between the string tensi
on and the density of monopoles in charged clusters is in reasonable agreem
ent with predictions. We study the cluster structure of the vacuum in both
phases of the model.