A volcano erupted just north of the Icelandic fishing village of Grindavik early on Sunday, just hours after local residents were evacuated, authorities said.
This is Iceland's fifth volcanic eruption in almost three years. The most recent occurred on December 18 in the same region, southwest of the capital Reykjavik.
The eruption began at 8:00 am (0800 GMT), the Icelandic Meteorological Office (IMO) said.
Airline flights were not affected.
Live images broadcast by Icelandic media showed jets of glowing orange lava spewing up in the sunrise.
"A crack has opened up on both sides of the dykes that have begun to be built north of Grindavik," the Met Office wrote.
"From measurements from the Icelandic coastguard helicopter, the (lava's) perimeter is now about 450 metres (yards) from the northernmost houses in the town," it said.
Seismic activity had intensified overnight and the town's few remaining residents were evacuated around 3:00 am, public broadcaster RUV reported.
Most of the 4,000 residents of Grindavik had been evacuated as a precaution on November 11 after scientists said a tunnel of magma was shifting beneath them.
A series of small earthquakes -- sometimes hundreds per day -- created large cracks in roads, home and buildings.
Shortly after the December 18 eruption, residents were allowed to return for brief periods.
They were authorised to regain their homes permanently on December 23 but only a few dozen chose to do so.
Late on Saturday, authorities ordered an emergency evacuation to be completed by Monday due to growing seismic activity and its impact on the large cracks already present in the town.
On Wednesday a 51-year-old Icelandic workman who was repairing a crack in a residential garden disappeared when the ground suddenly gave way beneath him.
He fell more than 30 metres. The intensive search to find him was called off on Friday because the area was too dangerous.
Authorities accelerated the evacuation order overnight when seismic activity intensified.
"What matters is where the lava flows. It is now very important to monitor it," IMO volcanologist Kristin Jonsdottir told RUV.
Officials are keeping a close eye on the area's Svartsengi geothermal plant, which provides electricity and water to the 30,000 residents of the Reykjanes peninsula.
Workmen have been building a wall to protect the facility since November.
Until March 2021, the Reykjanes peninsula had not experienced an eruption for eight centuries.
Fresh eruptions occurred in August 2022, and July and December 2023, leading volcanologists to say it was probably the start of a new era of activity in the region.
Iceland is home to 33 active volcano systems, the highest number in Europe.
Situated in the North Atlantic, it straddles the Mid-Atlantic Ridge, a crack in the ocean floor separating the Eurasian and North American tectonic plates.
