The first international hit for an Icelandic artist was probably Mezzoforte's "Garden Party" (1983). A song of their 4. Album "Surprise Surprise". This jazz-funk song went up to number 17 on the British pop chart in the spring of 1983, and also in the charts in most European countries.
"Garden Party" Version Live @ Reykjavik anno 2007
www.youtube.com/watch?v=mXUIOV4FGC4&hl&fmt=18
"Icebreaker"
www.youtube.com/watch?v=JqNPHuD58GU&hl&fmt=18
"Prime Time"
www.youtube.com/v/2d3848naxhk&hl&fmt=18
"Four Courners"
www.youtube.com/v/rcBez5i07X0&hl&fmt=18