Throughout the Cold War, the nation of Iceland was a member of the North Atlantic Treaty Organization (NATO) and allied with the United States, hosting a US military presence in Keflavík Air Base from 1951 to 2006.
In 1986, Iceland hosted a summit in Reykjavík between United States President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev, during which they took significant steps toward nuclear disarmament.
Five years later, in 1991, Iceland became the first country to recognize the renewed independence of Estonia, Latvia, and Lithuania when they broke away from the Soviet Union.
Early in World War II, the neutral Kingdom of Iceland had declined an offer of British protection.
When the occupation of Denmark by Nazi Germany caused the two countries to sever communications, Iceland claimed sovereignty.
The United States supported the founding of the Republic of Iceland in 1944 and promised to withdraw its troops once the war ended, but failed to do so when Nazi Germany was defeated in 1945.
The pro-Western Icelandic Prime Minister Ólafur Thors considered such an agreement impossible at the time due to public opposition.
This interim agreement stipulated that the United States military would leave the country within six months and that the US-built Keflavík Airport would become the property of the Icelandic government.
[9] Basing US military forces on Icelandic soil was considered domestically unfeasible at the time, so the options were between a Scandinavian Defence Union and NATO.
Iceland had prospered during the war, and the immediate post-war period was followed by substantial economic growth, driven by industrialisation of the fishing industry and the Marshall Plan programme, through which Icelanders received by far the most aid per capita from the United States of any European country (at US$209, with the war-ravaged Netherlands a distant second at US$109).
[17][18][19] During each of the Cod Wars, Icelandic officials explicitly or implicitly threatened to withdraw from NATO and expel US forces unless the fisheries disputes would be resolved favorably.
[17] With the exception of periods during the Second and Third Cod Wars, Icelanders grew increasingly supportive of NATO membership during the 1970s.
[27] According to this defense treaty, the United States accepted full responsibility for the defence of Iceland for an unspecified period of time.
[30] The Americans were allowed to keep 3900 troops on Icelandic soil, access territory in Keflavík and build four radar stations.
[28] Reports of rape, prostitution, strip teases, druggings, divorces, children born out of wedlock and other controversial behaviors were prominent in newspapers.
[17][34] There were two serious attempts to abrogate the bilateral defence agreement with the United States; during the tenure of the left-wing governments of 1956-58 and 1971–1974.
The Hungarian Uprising of 1956 made it unfeasible for the 1956-58 government to make radical changes to Iceland's security arrangements.
American television and radio broadcasts intended for soldiers at the US base could be intercepted by local Icelanders.
The Cod Wars were a series of confrontations between the United Kingdom and Iceland regarding fishing rights in the North Atlantic.
[49] Iceland hosted a summit in Reykjavík in 1986 between United States President Ronald Reagan and Soviet Premier Mikhail Gorbachev, during which they took significant steps toward nuclear disarmament.
Only a few years later, in 1991, when Jón Baldvin Hannibalsson was foreign minister, Iceland would become the first country to recognize the independence of Estonia, Latvia, and Lithuania as they broke away from the Soviet Union.
During the Proto-Cod War of 1952-1956, the USSR and the US unburdened Iceland of much of the fish left unsold by the British landing ban during the dispute.
[59] In event of a Soviet invasion, the Americans had plans in 1948 to transport 80,000 soldiers by sea and engage the enemy in combat.
Among them is Vasili Mitrokhin who would become a major and senior archivist for the Soviet Union's foreign intelligence service, the First Chief Directorate of the KGB.
[61] By the end of the Cold War, the town of Keflavík on the Reykjanes peninsula had become economically dependent on the US Air Base.
Under the government of Halldór Ásgrímsson, a diplomatic mission was sent to Washington, D.C. to persuade the US military to stay, but it met with no success.