Thousands of earthquakes have been caused by a massive build-up of magma in a nine-mile fissure.
The fissure is around 3.5 kilometres northwest of Grindavik, a town of 4,000 people on the Reykjanes peninsula which has been evacuated.
How likely is an eruption?
The Icelandic Met Office said on Wednesday that the ‘probability of an eruption is still considered high’.
Vidir Reynisson, head of Iceland’s Civil Protection and Emergency Management agency, said experts are ‘really concerned about all the houses and the infrastructure in the area’.
John Smellie, a volcanologist at the UK’s Leicester University, said lava flows ‘relatively slowly, and people can generally at least drive away or run away from it.’
He said this means that deaths are unlikely.
The eruption could be more violent if it blows through ice or water.
If it occurs in the southern tip of the fissure, which is underwater, it could cause ash clouds that would affect flights at Iceland’s international airport.
Different to 2010 Eyjafjallajokull eruption?
Any eruption is not expected to have anywhere near as much impact as the one from the Eyjafjallajokull volcano in 2010.
That eruption shot huge amounts of ash into the atmosphere, forcing the cancellation of some 100,000 flights and leaving more than 10 million travellers stranded.
It exploded through 200 metres of ice, making it ‘highly violent’, Smellie said.
The interaction with the water created more fine ash particles that would then drift across Europe.
The latest eruption threat is ‘completely different situation’ Smellie said.
Marc Reichow, a geochemist at Leicester, said it is ‘unlikely to happen this time as there is no substantial amount of ice in the area where an eruption is expected to occur’.