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Iceland remained one of the world's last larger islands uninhabited by humans until it was discovered and settled by immigrants from what is now Scandinavia and from the British isles during the 8th and 9th centuries. The sagas claim that Ing󬦵r Arnarson was the first man to settle in Iceland (Reykjaví«© in 874 although archeological evidence does not seem to bear this out. The families were accompanied by servants and slaves, some of whom were Celts from Scotland and Ireland (known as Westmen to the Norse). Some literary evidence suggests that Irish monks may have been living in Iceland before the arrival of Norse settlers, but no archaeological evidence has been found.

The Althing (general assembly) was founded in 930, marking the beginning of the Icelandic Commonwealth. It was the predecessor to the modern Icelandic legislature. The Althing is the oldest parliament in the world.

Iceland was fairly independent from Norway until 1262, when it became a Norwegian crown colony, and from 1387 Iceland was in practice ruled by Denmark, following the union of the two kingdoms. When that union was dissolved in 1814, through the Treaty of Kiel, which saw Norway being handed over to Sweden, Iceland became a Danish dependency. Home rule was granted by the Danish government in 1904, and independence followed in 1918. Foreign relations were carried out by the Danes, as instructed by the Icelandic government until the World War II military occupation of Denmark by Germany in 1940. Subsequently, Iceland was occupied by the Allies. The Danish king remained the de jure sovereign of the nation until 1944, when the current republic was founded after the 1918 treaty had elapsed.

The new republic became a charter member of NATO in 1949 and signed a treaty with the United States in 1951 to take responsibility for the defence of Iceland. Today the US continues to operate a military base in Keflaví« based on this agreement, but Iceland has no armed forces of its own. The economy of Iceland remained dependant of fisheries in the post-war decades and the country has had several clashes with its neighbours over this vital resource, most notably the Cod Wars with the British. The economy has become more diverse recently owing to large investments in heavy industry such as aluminium smelting and deregulation and privatization in the financial sector. Iceland is a member of the Common market of the European Union through the EEA agreement but has never applied for membership of the EU itself. If Iceland were to join the EU they would have to share the fishing waters near Iceland and that is still a complicated issue for their economy.
Last edited by Anna (6:58, 06 January 2006)