The eruption around midday on Wednesday prompted the evacuation of the nearby fishing town of Grindavik as well as the Blue Lagoon thermal spa tourist attraction and the Svartsengi power plant, which supplies electricity and water to around 30,000 people on the peninsula.
"The beginning was very intense but it began slowing down after a few hours" and on Thursday lava was spewing "out of a few vents" in the 3.4-kilometre (2.1-mile) fissure, a natural hazards experts at the Icelandic Meteorological Office (IMO), Lovisa Gudmundsdottir, told AFP.
On Thursday, lava and smoke could still be seen pouring out of sections of the fissure that opened in the ground near Sundhnukagigar, north of Grindavik.
The lava was still flowing toward the town but was being held back by protective barriers built of earth and stone about a kilometre north of the town, a spokeswoman for the Department of Civil Protection and Emergency Management, Hjordis Gudmundsdottir, told AFP.
"If we hadn't built the walls, Grindavik wouldn't be here today," she said, adding that the lava had covered two of the three roads into the town.
Police and emergency responders were in the town on Thursday checking the situation, she added.
The eruption was the fifth in six months on the Reykjanes peninsula, with volcanoes erupting in the region in December, January, February and March.
In the January eruption, lava flowed into Grindavik's streets, engulfing three homes on the edge of the town.
Most of the town's 4,000 residents had already evacuated in November, before the December eruption.
Until March 2021, the Reykjanes peninsula had not experienced an eruption for eight centuries.
That one was followed by others in August 2022 and in July and December 2023, leading volcanologists to believe the start of a new era of seismic activity in the region had begun.
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