Reykjavik - Iceland's central bank on Thursday said it would keep its key interest rate at 18 per cent, after raising the rates at the end of October.

The central bank, or Sedlabanki, raised interest rates from 12 to 18 per cent on October 28. In mid-October it had cut the rates from 15.5 per cent to 12 per cent.

It said unemployment has risen "much faster" than it predicted in November. Registered unemployment measured 4.8 per cent in December and in January average unemployment was estimated to be over 6 per cent.

Reykjavik - Iceland's outgoing fisheries minister has angered conservationists after announcing a hike of the North Atlantic nation's whaling quota.

The five-year quota to 2013 amounted to 150 fin whales and 100 minke whales a year, the Whale and Dolphin Conservation Society (WDCS) said Wednesday.

Iceland angered conservationists in 2006 when the government said it would resume commercial whaling and set a quota of nine fin whales and 30 minke whales, of which six fin whales were caught.

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 - A police officer and several protesters were injured when a protest outside Iceland's parliament building overnight turned violent, broadcaster RUV reported Thursday.

Police used teargas to break up the gathering to demand the resignation of the Icelandic government and early elections in the wake of the financial crisis. The police officer was hit by a stone.

Reykjavik - Protests against the financial crisis in Iceland continued overnight Wednesday with protesters lighting bonfires outside parliament, broadcaster RUV reported.

Some 1,000 protesters set fire to a Christmas tree outside the parliament building and also added park benches and sticks to some bonfires.

Police used mace and batons to disperse the protesters, who did not disperse until around 3 am (0300 GMT), the report said, adding that four people were arrested.

The demonstration was believed to have been the largest since 1949 when protests were staged against Iceland joining NATO.

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.