Iceland's defences consist of the Icelandic Coast Guard which patrols Icelandic waters and airspace and other services such as the National Commissioner's National Security and Special Forces Units. Iceland is however the only NATO member which maintains no standing army, although there is no legal impediment to forming one and Icelandic services perform the operations fellow NATO allies relegate to their standing armies.

The Coast Guard consists of three ships and four aircraft and armed with small arms, naval artillery, and Air Defense weaponry. The Coast Guard also maintains the Icelandic Air Defense System, formerly part of the disestablished Defence Agency, which conducts ground surveillance of Iceland's air space.

Units subordinated to the National Commissioner also take part in Iceland's defences. Foremost of these are the National Security Unit, which handles intelligence operations and the special unit Víkingasveitin, a highly trained and equipped counter terrorism unit which is part of the National Police force.

Iceland ⁱ/ˈaɪslənd/ (Icelandic: Ísland, IPA: [ˈislant]) is a Nordic European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. The country has a population of about 320,000 and a total area of 103,000 km² (40,000 sq mi). The capital and largest city is Reykjavík, with the surrounding areas in the southwestern region of the country being home to two-thirds of the country's population. Iceland is volcanically and geologically active. The interior mainly consists of a plateau characterised by sand fields, mountains and glaciers, while many glacial rivers flow to the sea through the lowlands. Iceland is warmed by the Gulf Stream and has a temperate climate despite a high latitude just outside the Arctic Circle.

According to Landnámabók, the settlement of Iceland began in AD 874 when the chieftain Ingólfur Arnarson became the first permanent Norse settler on the island. Others had visited the island earlier and stayed over winter. Over the following centuries, Norsemen settled Iceland, bringing with them thralls (slaves) of Gaelic origin. From 1262 to 1918 Iceland was part of the Norwegian and later the Danish monarchies. Until the 20th century, the Icelandic population relied largely on fisheries and agriculture, and the country was one of the poorest and least developed in the world. Industrialisation of the fisheries and aid from the Marshall Plan brought prosperity in the years after World War II, and by the 1990s it was one of the world's wealthiest countries. In 1994, Iceland became party to the European Economic Area, which made it possible for the economy to diversify into economic and financial services.