This paper discusses the development of a coupled atmospheric-ice model with a comprehensive ice dynamics, cavitating fluid rheology and an open water parameterization. The results center on the ice thickness and concentration distribution in the Arctic basin where the inclusion of ice rheology has maximum impact. The influence of the wind stresses calculated by an atmospheric model with stability dependent surface drag coefficients is discussed along with the role of the ocean currents and ocean-ice drag coefficient. Under winter wind stress conditions the model had a tendency to buildup ice on the Siberian coast. The introduction of a partial slip condition at land-ice boundaries in the model designed to prevent this buildup is discussed, and the best choice for the amplitude of the slip at the land boundaries in this model is found to be 0.4. The ice model results are compared with the available observational data sets on ice thickness, concentration and ice velocity fields to test the validity of the model simulations. ¿ 1998 American Geophysical Union