Editing History of Iceland (section)

===World War II===
{{Further|Invasion of Iceland|Iceland during World War II|Ástandið}}

[[File:HMS Berwick (65).jpg|left|thumb|{{HMS|Berwick|65|6}} led the British [[invasion of Iceland]].]]

With war looming in the spring of 1939, Iceland realized its exposed position would be very dangerous in wartime. An all-party government was formed, and [[Deutsche Luft Hansa|Lufthansa]]'s request for civilian airplane landing rights was rejected. German ships were all about, however, until the British blockade of Germany put a stop to that when the war began in September. Iceland demanded Britain allow it to trade with Germany, to no avail.<ref>Hardarson, (1974) pp. 29–31</ref>

The [[occupation of Denmark]] by [[Nazi Germany]] began on 9 April 1940, severing communications between Iceland and Denmark.<ref name=":4">{{Cite book|title = History of Iceland|last = Karlsson|first = Gunnar|year = 2000|page = 314}}</ref> As a result, on 10 April, the Parliament of Iceland took temporary control of foreign affairs (setting up what would be the forerunner of the [[Ministry for Foreign Affairs (Iceland)|Ministry for Foreign Affairs]]) and the Coast Guard.<ref name=":11">{{Cite book|title=Fyrstu forsetarnir|last=Jóhannesson|first=Guðni Th.|year=2016|pages=35–36}}</ref> Parliament also elected a provisional governor, [[Sveinn Björnsson]], who later became the Republic's first president. Iceland became ''de facto'' fully sovereign with these actions.<ref name=":11" /> At the time, Icelanders and the Danish King considered this state of affairs to be temporary and believed that Iceland would return these powers to Denmark when the occupation was over.<ref name=":11" />

Iceland turned down British offers of protection after the occupation of Denmark, because that would violate Iceland's neutrality. Britain and the U.S. opened direct diplomatic relations, as did Sweden and Norway. The German takeover of Norway left Iceland highly exposed; Britain decided it could not risk a German takeover of Iceland.
On 10 May 1940, British military forces began an [[invasion of Iceland]] when they sailed into Reykjavík harbour in [[Operation Fork]].
There was no resistance, but the government protested against what it called a "flagrant violation" of Icelandic neutrality, though Prime Minister [[Hermann Jónasson]] called on Icelanders to treat the British troops with politeness, as if they were guests.<ref name=":4" /> They behaved accordingly, and there were no mishaps. The occupation of Iceland lasted throughout the war.<ref>Hardarson, (1974) pp. 32–33</ref>

[[File:Iceland, Sanskeid Range. 37mm sub-caliber mounted on a 75mm field howitzer, 19th and 21st Field Artillery Regiment.jpg|thumb|220px|US Army training in Iceland in June 1943.]]
At the peak, the British had 25,000 troops stationed in Iceland,<ref name=":4" /> all but eliminating unemployment in the Reykjavík area and other strategically important places. In July 1941, responsibility for Iceland's occupation and defence passed to the United States under a U.S.-Icelandic agreement which included a provision that the U.S. recognize Iceland's absolute independence. The British were replaced by up to 40,000 Americans, who outnumbered all adult Icelandic men. (At the time, Iceland had a population of around 120,000.)<ref>Hardarson, (1974) pp. 43–45</ref>

Approximately 159 Icelanders' lives have been confirmed to have been lost in World War II hostilities.<ref name=":7">{{Cite web
| url = http://www.visindavefur.is/svar.php?id=5057
| title = Hve margir Íslendingar dóu í seinni heimsstyrjöldinni?
| website = Vísindavefurinn
| access-date = 27 February 2016
}}</ref> Most were killed on cargo and fishing vessels sunk by German aircraft, U-boats or mines.<ref name=":7" /><ref name=":5" /> An additional 70 Icelanders died at sea, but it has not been confirmed whether they lost their lives as a result of hostilities.<ref name=":7" /><ref name=":5">{{Cite book|title = History of Iceland|last = Karlsson|first = Gunnar|year = 2000|page = 316}}</ref>

The occupation of Iceland by the British and the Americans proved to be an economic boom, as the occupiers injected money into the Icelandic economy and launched various projects. This eradicated unemployment in Iceland and raised wages considerably.<ref name=":15">{{Cite journal|last=Steinsson|first=Sverrir|title=A Theory of Shelter: Iceland's American Period (1941–2006)|url=https://www.academia.edu/34997567|journal=Scandinavian Journal of History|language=en|volume=43|issue=4|pages=539–63|doi=10.1080/03468755.2018.1467078|year=2018|s2cid=150053547}}</ref><ref name=":03">{{Cite web|url=https://www.routledge.com/Small-States-and-Shelter-Theory-Icelands-External-Affairs-1st-Edition/Thorhallsson/p/book/9781138615373|title=Small States and Shelter Theory: Iceland's External Affairs|date=2018|editor-last=Thorhallsson|editor-first=Baldur|publisher=Routledge}}</ref> According to one study, "by the end of World War II, Iceland had been transformed from one of Europe’s poorest countries to one of the world’s wealthiest."<ref name=":15" />