A volcano has erupted in southwest Iceland, spewing lava and smoke across a wide area after weeks of intense earthquake activity, the country's Meteorological Office has confirmed.

Fearing a significant eruption on the Reykjanes peninsula, authorities last month evacuated the nearly 4,000 inhabitants of the fishing town of Grindavik and closed the nearby Blue Lagoon geothermal spa.

“Warning: Eruption has started north of Grindavik by Hagafell,” the Met Office wrote on its website, noting that the eruption began only a few kilometres from the town and cracks in the ground stretched toward the village located about 40 km (25 miles) south-west of Iceland's capital city Reykjavik.

Reykjavik's nearby Keflavik International Airport remains open, albeit with numerous delays listed for both arrivals and departures.

Iceland volcano erupts and spews huge amounts of lava after weeks of earthquakesREUTERS

Images and livestreams of the eruption show molten rock spewing spectacularly from fissures in the ground, their bright yellow and orange colours set in sharp contrast against the dark night sky.

“Seismic activity together with measurements from GPS devices indicate that the magma is moving to the southwest and the eruption may continue in the direction of Grindavik,” the Met Office said.

The crack in the earth's surface was around 3.5 km long and had grown rapidly, it added.

Some 100 to 200 cubic metres (3,530 to 7,060 cubic feet) of lava emerged per second, several times more than in previous eruptions in the area.

Iceland volcano erupts

Local police said they had raised their alert level as a result of the outbreak and the country's civil defence warned the public not to approach the area while emergency personnel assessed the situation.

Located between the Eurasian and the North American tectonic plates, among the largest on the planet, Iceland is a seismic and volcanic hot spot as the two plates move in opposite directions.

But eruptions are still hard to predict. In mid-November, Grindavik inhabitants were whisked from their homes in the middle of the night as the ground shook, roads cracked and buildings suffered structural damage.

Seismologists believed at the time an eruption was imminent, but the geological activity later eased.

​Fire erupts at Keflavik

Wall of fire as lava spews from Iceland volcano

The Reykjanes peninsula in recent years saw several eruptions in unpopulated areas.

In March 2021, lava fountains erupted from a fissure in the ground measuring between 500 to 750 metres (1,640 to 2,460 feet) long in the region's Fagradalsfjall volcanic system.

Volcanic activity in the area continued for six months that year, prompting thousands of Icelanders and tourists to visit the scene. In August 2022, a three-week eruption happened in the same area, followed by another in July of this year.