The 6.3 magnitude shaking injured between 15 to 30 people, according to officials, and was centered just southeast of the capital, Reykjavik, at 3:46 p.m. local time.
Iceland's Channel 2 television reports that the road between Reykjavik and the town of Selfoss was closed by quake damage. Thursday's quake was centered almost directly beneath Selfoss at a depth of 6 miles (10 km).
Landslides triggered by the quake were reported elsewhere on the island.
The Iceland Meteorological Office told reporters that Thursday's quake was the strongest to hit the country since two large quakes struck in 2000, which followed 88 years of relative seismic silence.
The North Atlantic island of Iceland is located halfway between Europe and North America, and has a population of about 300,000.
About four-fifths of its rocky surface is uninhabited. The island was first settled by Vikings from Norway in the ninth century A.D.
