Iceland was settled in the late 9th and early 10th centuries, principally by Norwegians. In A.D. 930, the ruling chiefs of Iceland established a republican constitution and an assembly called the Althing--the oldest parliament in the world. Iceland remained independent until 1262 when the Norwegian king succeeded in extending his sovereignty to Iceland. It passed to Denmark late in the 14th century when Norway and Denmark were united under the Danish crown.

Early in the 19th century, national consciousness revived in Iceland. The Althing had been abolished in 1800, but in 1843, it was reestablished as a consultative assembly. In 1874, the Althing obtained limited legislative authority, and a constitution was granted to Iceland. The constitution was revised in 1903 when home rule was granted, and a minister for Icelandic affairs, residing in Reykjavik, was made responsible to the Althing. The Act of Union, a 1918 agreement with Denmark, recognized Iceland as a fully sovereign state united with Denmark under a common king. Iceland established its own flag and asked that Denmark represent its foreign affairs and defense interests.

German occupation of Denmark in 1940 severed communications between Iceland and Denmark. In May 1940, Iceland was occupied by British military forces. In July 1941, responsibility for Iceland's defense passed to the United States under a U.S.- Icelandic defense agreement. Following a plebiscite, the country was formally established as an independent republic on June 17, 1944.

In October 1946, the Icelandic and U.S. Governments agreed to terminate U.S. responsibility for the defense of Iceland, but the United States retained certain rights at Keflavik. Iceland became a charter member of the North Atlantic Treaty Organization (NATO) in 1949. After the outbreak of hostilities in Korea in 1950, and pursuant to the request of NATO military authorities, the United States and Iceland agreed that the United States should again be responsible for Iceland's defense. This agreement, signed on May 5, 1951, is the authority for U.S. military presence in Iceland. Iceland is the only NATO country with no military forces of its own.

Political Conditions

Growing economic difficulties led to the resignation in March 1983 of the center-left coalition government led by a faction of the Independence Party under Prime Minister Gunnar Thoroddsen. As a result of elections in April 1983, a center-right coalition comprising the Independence Party and Prime Minister Steingrimur Hermannsson's Progressive Party assumed power on May 26. The People's Alliance, the Social Democratic Party, the Women's List, and the Social Democratic Alliance are in opposition. New elections must be held by the spring of 1987.

The present coalition is committed to Iceland's continued membership in NATO and to maintaining the presence of U.S. forces at the Keflavik NATO Base. The principal goal of the coalition has been to adopt economic measures to confront Iceland's economic difficulties.

Source: U.S. Department of State, Bureau of Public Affairs, August 1986.