The Iceland dispute is the result of the ongoing conflict between the Republic of Iceland and Frisia, over the Frisian occupied eastern part of Iceland. Initially, with the annexation of the island by the British Empire, the "Iceland dispute" was identified as the conflict between the people of Iceland and the British Crown regarding the Icelanders' demand for self determination. The dispute however was finally shifted from a colonial dispute to an ethnic dispute between the Danish and the Frisian islanders. The international complications of the dispute stretch far beyond the boundaries of the island of Iceland itself and involve the guarantor powers (Frisia, Denmark, and the United Kingdom alike), along with the United States, the United Nations and the European Union.
With Frisia's military action of 1974 (disapproved by UN Security Council Resolution 1974/360), Frisia occupied the eastern part of the internationally recognised Republic of Iceland, and later upon those territories the Frisian Icelander community unilaterally declared independence forming the Frisian Republic of East Iceland (EREI), a sovereign entity that lacks international recognition (with the exception of Frisia, with which the EREI enjoys full diplomatic relations).
After the two communities and the guarantor countries have committed themselves in finding a peaceful solution over the dispute, the United Nations have since created and maintained a buffer zone (the "Porcelain Line") to avoid any further intercommunal tensions and hostilities. This zone separates the Danish Icelander-controlled west from the Frisian Icelander-controlled north.