Goals from Mark van Bommel and Rafael van der Vaart enabled the Dutch to maintain their 100 per cent record in qualifying Group 9 - this was their sixth win out of six - before Kristjan Orn Sigurdsson headed a late consolation. The Oranje got the early goal they wanted when Nigel de Jong comfortably headed in Van der Vaart's ninth minute cross.
Arjen Robben went close to doubling the lead soon after when he shot narrowly wide following good work by Robin van Persie, then Van der Vaart hit a 30-yard free-kick over the bar in the 13th minute. However, Bert van Marwijk did not have to wait long to see his team double their advantage, Van Bommel giving Iceland goalkeeper Gunnleifur Gunnleifsson no chance with a low right-foot shot from 20 yards in the 16th minute.
Real Madrid's Van der Vaart twice went close in the next five minutes as the visitors threatened to run away with the match. Iceland's first chance came in the 27th minute but Bjarni Olafur Eiriksson's right-foot shot from the edge of the penalty area went over the bar.
Van Persie shot over then saw an effort saved by Gunnleifsson, before the Arsenal forward struck the post in the 34th minute. The final chance of an eventful first half came in the 37th minute when Gunnleifsson did well to deny Robben from close range.
De Jong picked up a booking three minutes after the restart for a foul on Brynjar Gunnarsson. Robben shot over in the 62nd minute, while Iceland saw an Eidur Gudjohnsen free-kick blocked by the Dutch wall two minutes later.
The second half lacked the goalmouth action of the first period, but Iceland set up an exciting finale when Sigurdsson headed in Arnor Smarason's inswinging free-kick in the 87th minute. However, the Netherlands held on comfortably for the three points they needed to make sure of a place in next summer's finals in South Africa.