Rare-earth, Sc, V, Cr, Fe, Co, and Ni contents of basalts from the Skagi and western neovolcanic (Langj¿kull, Thingveillir, and Reykjanes peninsula) zones of Iceland are reported. In comparison to the Langj¿kull zone, which is dominated by olivine tholeiites, the Skagi zone is characterized by a uniform tholeiitic basalt province significantly higher in Fe, Na, Ti, P, K, Fe*/(Fe*+Mg), La/Sm, and large-ion lithophile trace elements with bulk crystal-melt partition coefficients D≪1 (La, K, and P) and lower in Mg, Ca, and trace elements, with D>1 (Ni and Cr); however, Co, with D?1, remains practically constant throughout the zones. Basalts from the Reykjanes peninsula are generally intermediate between those from the Skagi and the Langj¿kull zone, and those from the Thingvellir zone resemble mostly those from Langj¿kull. The petrologic and geochemical discontinuity between Skagi and Langj¿kull is abrupt and apparently coincides with steepening of existing geothermal gradients and thickening of the Iceland crust from south to north, as well as with an age discontinuity. On the other hand, variation along the neovolcanic zone from the Langj¿kull-Thingvellir zone to the Reykjanes peninsula and the Reykjanes Ridge are gradational. Fractionation processes involving crystal and melt are primarily responsible for the compositional variations observed along these zones. Modeling suggest that the most primitive melts of the four zones can be derived by variable degrees of melting of a relatively homogeneous lherzolite mantle source with an approximately chondritic relative RE pattern but enriched 4-6 times, thus clearly distinct from the LRE-Depleted mantle source of 'normal' ridge basalts sourth and north of Iceland. Estimated degrees of melting range 8-10% for Skagi, 18-20% for the Reykjanes peninsula, and 30-50% for the Thingvellir and Langj¿kull zones. The estimated transition metal abundance pattern of the Iceland lherzolite mantle is strongly fractionated in relation to Cl chondrites (Sc, Ti, and V are enriched, and Cr, Mn, Fe, Co, and Ni are depleted). In addition, chemical dispersion within the four zones requires shallow depth fractional crystallization of olivine, plagioclase, and clinopyroxene, up to 50% for Skagi and to a lesser extent for the western neovolcanic zone. Both geochemical and geophysical data suggest intense melting beneath central Iceland, decreasing in intensity southward along the western oeovolcanic zone. The model is consistent with a mantle plume upwelling beneath Iceland and with published rheological and thermal analyses of such a phenomenon which suggest a smaller half width for the thermal anomaly than for the upward motion of the plume. Independently, Geochemical evidence suggest that the melting anomaly reaches a minimum on the southwest Iceland shelf (~63¿20'N), whereas binary mantle plume-LIL-depleted asthenosphere mixing extends to 61¿N, judging from La/Sm, Sr, and Pb isotopic gradients along the Reykjanes Ridge. Finally, the similarity in chemistry of basalts from Skagi and the southern part of the eastern neovolcanic zone, the low heat flow, and the small degree of melting required for Skagi basalts suggest a transient stage of rifting for both zones. Rifting along Skagi, 0.5-2.5 m.y. ago, appears to have been only emphemeral and never seems to have reached thermal maturity.