HAFNARFJORDUR, Iceland - Do elves exist? Like many Icelanders, Hildur Hakonardottir considers the question to be more complicated than it appears.

"This is a very, very, very delicate question," Ms. Hakonardottir, a retired museum director, said. "If you ask people if they believe in elves, they will say yes and no. If they say yes, maybe they don't, and if they say no, maybe they do."

Hypothetically speaking, what does she think elves look like?

"Well, my next-door neighbor is an elf woman," she declared suddenly. "She lives in a cliff in a rock in my garden."

Despite having seen the elf only once in 15 years -- enough time to determine that she was "bigger than life and dressed like my grandmother, in a 1930's national costume" -- Ms. Hakonardottir, 67, has no doubt of her existence. "My daughter once asked me, 'How do you know where elves live?"' she said. "I told her you just know. It's just a feeling."

It is a feeling that many people in Iceland apparently share. Polls consistently show that the majority of the population either believes in elves -- generally described as humanlike creatures who are fiercely protective of their rocky homes -- or is not willing to rule out their existence. But while believing in elves is rooted in Iceland's culture, it remains a touchy subject.

"You have to watch out for the Nordic cliché," the Icelandic singer Bjork told The New Yorker magazine several years ago. "A friend of mine says that when record-company executives come to Iceland, they ask the bands if they believe in elves, and whoever says yes gets signed up."