[3] At the last election in 1999 the two ruling parties together won 38 of the 63 seats, to maintain a majority in the Icelandic parliament.

So if a party has won two seats in a constituency, then the voter is only allowed to re-rank the top four ranked candidates on the list, with any rank altering by voters below this line simply being ignored when subsequently calculating the candidate vote shares within each party.

The same calculation process is then repeated, until all 9 leveling seats have been allocated to specific parties.

[6][7] The Social Democratic Alliance was the main left wing opposition party and their leader, Ingibjörg Sólrún Gísladóttir, a former mayor of Reykjavík, was hoping to become the first female Prime Minister of Iceland.

[8] The Social Democrats stressed welfare, health and housing which they said the Independence Party had failed to address.

[9] The Independence Party campaigned on their record of economic growth over the past decade.

[3] The Independence Party maintained a narrow lead over the opposition Social Democratic Alliance.

[13] The Social Democrats gained three seats; however their leader, Ingibjörg Sólrún Gísladóttir, was not elected,[14] as she had only placed herself 5th on the list of candidates for her district.