New Years Eve is one of a kind in Iceland.   Everyone participates when the new year arrives and celebrate with fireworks and celebrations.  People gather, shoot fireworks and greet everyone around.     Þrettándinn (the Thirteenth Night, i.e. 6th January) is celebrated with elf bonfires throughout the country and elf dances.
On New Years Eve and at Þrettándinn you will find bonfires on special locations throughout the country.  One of the most popular ones in Reykjavik is the bonfire at Ægisíða.    It is very festive to join the locals at bonfires and if you can we recommend you be there in time so you can see when they lit it up.
In Iceland Christmas Eve is on the 24th December (not the 25th December like in so many countries).    New Years is a big event for all Icelanders.   Every household buys fireworks to greet the new year.   People gather in the center of their town or stay at home with family and friends.    Icelanders love fireworks so be prepared for a good show!