If the White House and State Department are in search of a foreign-policy success, they might look to this barren and largely uninhabited island nation in the North Atlantic.
At a time when the survival of the NATO alliance is being questioned on both sides of the Atlantic, Iceland has come to view its participation in NATO with a new-found comfort.
In fact, there is an unprecedented warmth in relations between the United States and Iceland, which plays a vital role in defending NATO's northern flank.
''We have treated Iceland with a great deal of political sensitivity and it has paid off,'' says US Ambassador Marshall Brement, who many say is the first ''serious'' American envoy posted in Iceland. ''In terms of attitudes toward the US, we are as well off here as anywhere in Europe.''
Only recently has Iceland been able to bury its reputation as the ''reluctant ally'' - easing tensions created by the presence of a US Navy air base at Keflavik.
In 1949, when Iceland decided to join NATO, riots racked the capital, Reykjavik. In 1955 and 1973 Icelandic governments asked the US to withdraw its troops.
There used to be a demonstration in front of the US Embassy each year. But most of Iceland's 230,000 people now seem to accept the US presence.
''Icelandic support for the base and for the country's NATO affiliation hasn't seen such support in the last 20 years,'' says Jon Halldorsson, a special assistant to Prime Minister Gunnar Thoroddsen. ''The base, in particular, has become somewhat of a nonissue in Icelandic politics.''
There are several reasons for this:
* American privileges to leave the base area have been severely restricted, deflating local complaints that servicemen were intruding on everyday Icelandic life.
* Icelanders have begun to realize the base's role in Iceland's defense. ''We see it as a matter of collective defense,'' Mr. Halldorsson says.
* The leftist People's Alliance party has been silenced somewhat. By joining the coalition government it has in effect admitted defeat on the base and NATO issues.
Iceland is strategically important because it is roughly equidistant from Greenland, Norway, and the northern tip of Scotland. The 600 Soviet military surface vessels and 200 submarines based on the Kola Peninsula (more than half the Soviet flotilla) must pass by Icelandic waters to reach the Atlantic. Two AWACS surveillance planes and squadrons of F-4 interceptors and antisubmarine P- 3Cs are stationed at Keflavik to monitor Soviet activities in the area.
Relations with Iceland have not been tainted by the bickering with other West European allies. The US has let Iceland trade freely with the Soviet Union and is not pressing it to help maintain the defense force at Keflavik.
Dependence on Soviet oil has been cut from 100 percent to 60 in recent years.
People complain the Soviets are involved in broad undercover intelligence-gathering activities here.The Soviet Embassy has more officers than the Icelandic Foreign Ministry.
Iceland is not involved in the alliance debate over theater nuclear weapons.