Town evacuated as Iceland volcano begins to erupt

A volcano has begun erupting again in southwestern Iceland, just hours after authorities evacuated a nearby community and the Blue Lagoon spa.

Flames and smoke shot through the air on Tuesday as the volcanic fissure opened near the town of Grindavik, where about 40 homes have been evacuated, national broadcaster RUV reported.

The community, on the Reykjanes Peninsula, was largely evacuated a year ago when the volcano came to life after lying dormant for 800 years.

Webcams showed molten rock spewing out towards the community.

"The fissure is now about 500 metres long and has reached through the protective barrier north of Grindavik," Iceland's Met Office said in a statement.

"The fissure continues to grow, and it cannot be ruled out that it may continue to open further south."

The magma flow began about 6.30am, local time, accompanied by an intense earthquake storm similar to previous eruptions, the Met Office said.