Majority of Icelanders believe in elves. These elves usually live in rocky areas, have magical powers, and cause trouble if someone tries to disturb their home. In some cases, bulldozers have been reported to malfunction when trying to work on a supposed elf site. And in Iceland this belief is so important that some people are actually called in to arbitrate with the elves in the hopes of getting them to leave.

Source: http://listverse.com/2013/12/15/10-cool-facts-about-iceland/