Reykjavik - The president of Iceland Tuesday asked the Social Democrats to try to form an interim government after the collapse of the ruling coalition.

The leader of the Social Democratic Alliance, Foreign Minister Ingibjorg Solrun Gisladottir, told reporters she hoped the minority government would be in place by the weekend.

The president wanted to include the Left-Green Movement, and with support from the Progressive Party the interim government would garner 34 seats in the 63-seat legislature.

Reykjavik - The president of Iceland was in talks Tuesday with party leaders to determine who would lead an interim government after the collapse of the ruling coalition.

On Monday, Prime Minister Geir Haarde handed in his government's resignation, saying the grand coalition formed in 2007 between his conservative Independence Party and Social Democrats had ended.

Haarde on Friday said his party recommended early elections on May 9, two years before schedule, but protesters that have staged daily protests since last week have demanded elections even sooner.

Reykjavik - Icelandic police Tuesday used tear gas to disperse protesters outside parliament during its first session for the year, broadcaster RUV reported.

Iceland has experienced a wave of protests since October when the country's three banks were nationalized when they faced collapse in the wake of the global credit crunch.

The North Atlantic nation of some 320,000 people is facing a severe contraction of its economy with unemployment due to rise sharply.

A paper prepared by the finance ministry said unemployment had reached 1.7 per cent in the fourth quarter 2008, and was predicted to increase this year to 7.8 per cent.

Reykjavik - Iceland on Tuesday said it was considering asking the European Court of Human Rights to probe the British government's use of anti-terrorist legislation to freeze Icelandic bank assets last autumn.

Britain made the move to force the Icelandic banks into administration in an effort to protect British bank deposits as the Icelandic banks faced collapse. But Iceland has maintained that the action - coming at a particularly serious point of the credit crunch - made matters worse for the North Atlantic nation's banks.

Reykjavik - One of Iceland's most prominent financiers became the target - literally - of peoples' anger over the collapse of Iceland's banks Glitnir and Landsbanki when he was hit in the face with a snowball, the DV newspaper reported Thursday. The paper said that prominent businessman and financier Jonsgeir Johannesson, 40, was emerging from a joint supervisory board meeting of the two failed banks when three young men hurled snowballs at him. One of the snowballs struck him in the face.

Reykjavik  - A spirit of rebellion has slowly enveloped Iceland, reinforced by every new horror story about the financial crisis.

"What responsibility to you feel over the fact that my debts have quadrupled, although I make my repayments on time and haven't taken out any new loans?" asked one ordinary citizen of Prime Minister Geir Haarde this week in front of 2,000 listeners.

"Somehow, everyone is responsible," the premier answered meekly. He added that his responsibility will have to be clarified before an independent "truth commission."