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Near Keflavík, Iceland - Icelandic horses in Southwest Iceland. The Icelandic horse is a breed of horse that has lived in Iceland since the mid-800s, having been brought to the island by Viking settlers. The Icelandic Horse is a man-made breed as it is a mixture of breeds and cross-breeds which were taken from Scandinavian and European countries to Iceland during the original and subsequent settlements. Because they are by-and-large pony-sized, they are commonly called "Icelandic ponies" in some countries.