HI mozib,
Abap to some extent has both...
Before an ABAP program is executed, the ABAP compiler must translate it into an intermediate language.
This form of program i.e. the program in this intermediate form is called an ABAP load.
Then the ABAP virtual machine comes into the picture. ABAP virtual machine is an interpreter for ABAP loads, that is, it can execute ABAP loads.
You can somewhat correlate the whole scenario with the process of Java compilation-interpret process.
for further assistance u can check the link below...
http://www.thaisapclub.com/forums/showthread.php?t=45
reward if helpful
Vamshi U