Iceland volcano: Lava inside Grindavik after new fissure opens in "worst-case scenario" PHOTO

A new fissure has bypassed barriers to protect a town in Iceland from lava - with the country's prime minister calling it a "very serious situation" and a top official saying it's the "worst-case scenario".

The volcanic eruption occurred on Sunday morning near Grindavik, the town evacuated in November before a massive eruption from the same peninsula, Sky News reports.

Lava threatened the community again yesterday, but Prime Minister Katrín Jakobsdottir said the barriers were "serving their purpose" and directed much of the flow away.

However, the emergence of a new fissure "within the town" bypassed defences and lava had "already reached several houses", she added.

Pictures show the semi-molten rock consuming at least two buildings.

"Obviously this is really changing the whole setup," said the prime minister.

"Because we were announcing yesterday that we were mostly worried about fissures and ruptures underneath the town, but now we have a volcanic eruption just really within the town. This is highly serious."

Civil defence chief Víoir Reynisson said that while the main stream of lava went outside the barriers, the new fissure inside them was the "worst-case scenario".

One option being considered is using pumps to cool the lava with seawater to hopefully limit damage to the town.

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Ms Jakobsdottir said the government would continue paying salaries and housing costs for residents who have again been forced to leave.

Iceland's President Gudni Johannesson said on X that "no lives are in danger, although infrastructure may be under threat".

He said no flights had been disrupted.

The eruption happened after a series of small earthquakes in the southwestern region, and Sunday's eruption was the fifth in the Reykjanes peninsula since 2021.

A spectacular eruption took place in December, with lava emerging from a two-mile-long crack after weeks of intense earthquake activity.

Grindavik, a town of 3,800 people, was ultimately spared as the lava flowed in a different direction.

People had been evacuated in November and had to stay away for six weeks, only being allowed back a few days before Christmas.

On Saturday, rescuers were also searching for a man who fell into a crack that opened up after last month's eruption.

The man had been working to fill crevasses in Grindavik, according to local media.

Hundreds of people have been looking for him since Wednesday but had to stop shortly before midnight on Thursday due to a rock fall.

Iceland, which sits above a volcanic hot spot in the North Atlantic, averages an eruption every four to five years.

The most disruptive in recent times was the 2010 eruption of the Eyjafjallajokull volcano, which spewed huge clouds of ash which led to widespread airspace closures over Europe.

Unlike Eyjafjallajokull, the Reykjanes volcano systems are not trapped under glaciers and are therefore not expected to cause similar ash clouds.