A strong earthquake of 6.1 magnitude hit Iceland today 31 miles south-east of the capital Reykjavik, damaging buildings in nearby Selfoss and sending terrified residents running into the streets.
Local police said no injuries had been reported.
The US Geological Survey said the quake struck at 3.46pm (1546 GMT) at a shallow 6.2 miles beneath the earth's surface.
A Reuters witness said there was severe damage to buildings in Selfoss, a southwestern town near the epicentre of the quake, and that dozens of panicking people had poured into the streets.
Residents in the capital also felt the impact.
"I am in Reykjavik ... everything was shaking. The glass in the windows shook and everybody was just really scared," said Audbjorg Olafsdottir, an economist.
"In Selfoss, where it happened, I heard everything is broken and people are standing outside in the street and everybody is terrified."
Olafsdottir said her sister in Selfoss had told her the quake had ruined her house.
Iceland, a volcanic island in the North Atlantic, has a population of about 300,000, and four-fifths of its rocky surface is uninhabited. It was first settled by Vikings from Norway in the ninth century AD.
A fault line in the earth's crust runs across the island, which is known for its geysers, volcanoes and glaciers.