"Aurora Borealis " or "Northern Lights" seen here above Reykjavik...

"Aurora Borealis " or "Northern Lights" seen here above Reykjavik town, capital city of Iceland. Credit: Visit Reykjavik

The night wind pushes us along quiet streets, past an outdoor sculpture garden, a church with a steeple shaped like a rocket and a statue of Leif Eriksson at the entrance.

Heads down to block the cold, we look up long enough to glance at shop windows stocked with boiled-wool caps and knit sweaters.

Our destination is Vegamot, a busy bar and restaurant in the capital city of Reykjavik, where a woman in a fur-lined parka recommends the salmon with Asian noodles.

"We measure the cold, not by the temperature, but by the wind," she tells us.

Despite its name, Iceland enjoys a relatively mild coastal climate. Winter highs average in the upper 30s, but when the wind kicks up, 30 degrees can feel frigid.

Shark meat and schnapps. Waffles and whale kebabs. Stunning sunsets and steaming outdoor pools. These are a few of my favorites things about Iceland in winter.

More New England fishing village than cosmopolitan capital, Reykjavik is a walkable town with a quaint seafront and houses sheathed in colorful corrugated steel. Alone in the middle of the Atlantic, at the edge of the Arctic Circle, Iceland may be one of the loneliest places on Earth, according to travel writer Pico Iyer. Or, one of the happiest, writes Eric Weiner, in "The Geography of Bliss."


WHAT TO EXPECT

When a banking crisis in 2008 brought the country to the brink of bankruptcy, the value of the Icelandic krona tumbled to half what it was against the U.S. dollar, making a visit here feel less like sticker shock, but still pricey. Last year's eruption of the Eyjafjallajökull volcano resulted in an unexpected tourism boost to the recession-weary country - but bargains still can be had.

Our room at the Guesthouse Eric the Red, a 12-room inn, was an off-season bargain at $94. It included a big breakfast, a welcome extra, considering the price of granola, fruit, yogurt and coffee for two at a local cafe was $30.

"As they say in Iceland," co-owner Edda Jonasdottir told us as she cranked up the registers in our room, "the only thing cheap is the heat." Almost everything except fish, sheep and energy - geothermal power plants heat most of the homes and buildings - has to be imported.


WHEN TO GO

The warm North Atlantic Current gives Iceland a moderate climate, with mild winters and cool summers. Average highs in Reykjavik climb into the 40s in April and 60s in July, when it's dark for only three or four hours each day. The shortest days are in mid-December and the first part of January, when the sun rises just after 11 a.m. and sets between 3:30 and 4 p.m. Things begin to improve in February, with sunrise by 10 a.m. and sunset at 5:15 p.m.


AROUND TOWN

At 244 feet, the "rocket-ship" Hallgrimskirkja Lutheran Church is the tallest in Iceland, with views all over the city from the bell tower, open weekdays and some winter weekends. Admission is about $2.75.

Also affordable are the city's many museums (most either free or cheap), art galleries and excellent restaurants.

Locals love their hot dogs with sweet mustard, but seafood is a wiser choice. As a light snow fell one afternoon, we walked to Saegreifinn on the harbor where former ship cook Kjartan Halldorsson, 71, serves whale kebabs and mugs of sea cucumber or lobster soup to customers at communal tables.

Coveted Icelandic wool sweaters are still selling for hundreds of dollars, so we made souvenirs out of bags of marzipan-filled licorice sold at a weekend flea market on the waterfront.

Stretch limos replace SUVs on the downtown streets on weekends, when dancing and drinking go on until dawn. For those not into all-night partying, there are cafes such as Babalu, an upstairs hideaway decorated with Flintstones knickknacks and comfy sofas.

Order a hot chocolate. Bring your knitting. Listen to Judy Garland singing "Somewhere Over the Rainbow." Maybe, as Eric Weiner concludes in "The Geography of Bliss," colder is happier.


HOT SPRINGS

Within an hour's drive of Reykjavik is a landscape filled with hot springs, geysers, waterfalls and fields of black lava rock, all carved by the same geological forces that triggered the Eyjafjallajökull eruption in April.

Iceland sits atop the boundary of the North American and Eurasian tectonic plates, making it a literal hotbed of volcanic and geothermal activity.

A cold-weather treat is going for a soak in one of the steaming, sulfur-scented outdoor public pools called "hot pots."

Many travelers visit the Blue Lagoon (bluelagoon.com) on the way to or from the airport. Our silver rings turned black after a couple of hours of paddling around the milky, 99-degree waters of the Blue Lagoon, a geothermal spa dug into a lava field next to a power plant. European tourists like dipping into crates filled with white silica mud that they rub on their faces to improve their complexions.

Entrance to the lagoon is about $36 for adults ($9 for ages 67 and older). Reykjavik Excursions offers transportation via a stop at the lagoon on its Flybus shuttle ($27 including luggage storage, re.is).

Our three-day stopover didn't allow for enough time to rent a car and drive around the island, so for a nutshell sense of Iceland's geography, we signed up for a daylong Golden Circle small group tour (about $76) with David Wellsbury of Iceland Horizon Tours (icelandhorizon.is).

Ducking in and out of a van for warmth, we joined a group of 15 others in exploring a field of steaming geysers, and the half-frozen Gullfoss waterfall about an hour's drive from Reykjavik.

In Thingvellir National Park, where Iceland's settlers formed the world's first parliament in A.D. 930, we hiked on both sides of a rift where the Earth split as the plates pulled apart.

IF YOU GO

BY AIR Icelandair and Iceland Express offer nonstop service between New York and Reykjavik. Round-trip fares generally average $250-$350, but flash sales or discount packages are common. Icelandair, for example, is currently offering a five-day "Nightlife" package from $689 a person that includes airfare from New York, lodging, airport transfers, dinner and a stop at the Blue Lagoon (icelandair.us).


STAY More personal and closer to the historical center than the big hotels are Reykjavik's many guesthouses and smaller hotels. Rates through April at Guesthouse Eric the Red (eric.is), near the Hallgrimskirkja church, are about $94 for doubles with private bathrooms and breakfast. Reykjavik City Hostel (hostel.is) has dorm rooms starting at $28. The CouchSurfing movement (as in, sleeping in a local's spare room instead of paying for a hotel) started in Iceland. Active members offer free lodging or the chance to meet for coffee or sightseeing (couchsurfing.org).


MORE INFORMATION Contact the Icelandic Tourist Board at goiceland.org.

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