Reykjavik/Stockholm  - Trading on the Icelandic stock exchange remained suspended Monday, the operator NASDAQ OMX Iceland said.

It had halted trading on Thursday owing to what the operator called "unusual market conditions."

The halt came in the wake of a government takeover of the North Atlantic nation's three main banking groups, including the largest group Kaupthing.

Parliament approved special legislation a week ago giving special powers to the Icelandic Financial Supervisory Authority.

Over the weekend, representatives of Iceland, Britain and the Netherlands discussed the repayment of foreign deposits frozen in the three Icelandic banks Landsbanki, Glitnir and Kaupthing.

Iceland was, according to a statement issued by Reykjavik, to "compensate each Dutch depositor up to a maximum of 20,887 euros (28,000 dollars)".

Icelandic and British delegations "met in a friendly atmosphere" to find a solution, Reykjavik said, suggesting that tempers had calmed somewhat after last week's heated exchanges between British Prime Minister Gordon Brown and Icelandic premier Geir Haarde.

Iceland's Finance Minister Arni M Mathiesen was meanwhile reported to be in Washington to discuss a possible emergency loan from the International Monetary Fund (IMF).

An IMF delegation flew to Iceland last week to follow events in the wake of the financial turmoil that has impacted the country of 300,000 people.

The Icelandic commercial banks have rapidly expanded their operations in recent years, and run up liabilities at least five times that of Iceland's GNP. (dpa)