The eruption of the Grindavik volcano is the second such natural disaster to befall the fishing town in the last few weeks.
ADVERTISEMENTA volcano has erupted in southwest Iceland - posing a threat to a nearby fishing town. Residents have since been evacuated, authorities said.
Video shows molten rock spewing from fissures in the ground and bright orange lava flow contrasting with the sky.
The eruption began north of the town of Grindavik. It was evacuated on Saturday amid a swarm of seismic activity, according to authorities.
Iceland has, in recent weeks, been battling to build barriers of earth and rock to prevent lava from reaching the town. However, the latest eruption appears to have penetrated the defences.
"According to the first images from the Coast Guard's surveillance flight, a crack has opened on both sides of the defences that have begun to be built north of Grindavík," the Icelandic Meteorological Office said in a statement.
"Lava is now flowing towards Grindavík. Based on measurements from the Coast Guard's helicopter, the perimeter is now about 450 metres from the northernmost houses in the town," the statement added.
Sunday’s eruption on the Reykjanes peninsula in southwest Iceland in less than one month and the fifth of its kind since 2021.
Last month, an eruption started in the Svartsengi volcanic system after all of Grindavik's 4,000 residents were evacuated and the Blue Lagoon geothermal spa, a popular tourist spot, was shuttered.
More than 100 Grindavik residents had returned to their homes since then before they were forced to leave again on Saturday.
On Sunday, Iceland's civil protection agency announced that it had raised its alert level to "emergency" - the highest on a three-level scale.
That signals an event which could potentially cause harm to people, communities, property as well as the environment.