The bulk of a tectonic plate is thought to move continuously at a rate consistent with the geologic average. On the other hand, movements are highly episodic at plate boundaries. We study the plate dynamics that relate to these two different modes by modeling the displacements observed using the global positioning system in Northeast Iceland 1987--1990. These observations were made about 10 years after an episodic divergent movement between the North American and Eurasian plates 1975--1981. The horizontal displacement field fits well a two-dimensional model of postrupture stress relaxation assuming a thin elastic layer overlying a layer of Newtonian viscosity. This analysis indicates values of about 10 m2/s for the stress diffusivity and 0.3--2¿1018 Pa s for the Newtonian viscosity of the lower layer. However, no significant correlation exists between the observed and modeled vertical displacements probably because of the relative inaccuracy of the vertical component observations. Assuming that contemporary plate motion is the sum of many displacements that have diffused from boundaries where episodic displacements occur periodically, we simulate the spatial transition from episodic to continuous plate movements. The plate ''boundary zone'' where movements are episodic or quasi-episodic is of the order of 100 km wide, depending on the stress diffusivity (which may be fairly uniform throughout the world) and the frequency of episodic movements. ¿ American Geophysical Union 1993