Scotland Women's hopes of sealing automatic qualification for Euro 2017 suffered a blow as Iceland eased to victory and moved top of Group 1.
The hosts fell behind when a free-kick from Hallbera Guony Gisladottir bypassed the defence into the net.
Harpa Thorsteinsdottir, Gunnhilder Yrsa Jonsdottir and Margret Lara Vioarsdottir all scored headers in quick succession as Iceland dominated.
And Kim Little missed a penalty for the hosts in time added on.
Scotland, already assured a top-two spot in the section, can still avoid a play-off if they gather enough points in away games with Belarus and Iceland while other results go their way.
|Read Friday's other Euro 2017 qualifier report|
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Iceland in control from the start
Anna Signeul's side had been used to getting everything their own way in the group but did not seem comfortable with the pace of the game in the early stages.
Goalkeeper Gemma Fay had been untroubled, though, until a free-kick wide on the right from Gisladottir was allowed to bounce in the box and over the line unchallenged.
Vioarsdottir headed over before Fay blocked Fanndis Frioriksdottir's shot as Iceland continued to impress.
Thorsteinsdottir also poked the ball over the line, but the offside flag spared Scotland's blushes.
Scotland's first real chance came when Jane Ross sneaked between two defenders and was inches away from Kirsty Smith's cross.
If the Scots had started the first half badly, the first few minutes of the second period were even worse.
Frioriksdottir's ball across caused havoc before Anna Bjork Kristjansdottir almost turned in the resulting corner, but mercifully for the home side, it appeared to bounce off her and over the bar.
Holmfriour Magnusdottir was then left alone in space outside the box and only a fine one-handed save from Fay denied her.
At the other end, Smith's curling shot towards the top corner almost caught out goalkeeper Guobjorg Gunnarsdottir.
Then Little slipped through Hayley Lauder and her driven ball across goal almost found Ross.
Just as the hosts were enjoying their best spell of the game, everything that could go wrong, did.
Thorsteinsdottir powerfully headed in Magnusdottir's cross and, moments later, Jonsdottir was left unmarked to loop a header over everyone and into the net.
Scotland were being destroyed down their left-hand side and another ball into the box found captain Vioarsdottir, who was also allowed a free header that she took full advantage of.
It could have been more for Iceland as Frioriksdottir's curling ball hit the frame of the goal.
The Scots also hit the post before the end, Little's spot-kick rebounding after Kristjansdottir had been penalised for handball.
Scotland: Fay, Mitchell (Lauder 46), Dieke, Love, Little, Crichton (Weir 55), Evans (L Ross 45), J Ross, Corsie, Beattie, Smith. Subs: Lynn, Ness, C Murray, J Murray.
Iceland: G Gunnarsdottir, Viggosdottir, Magnusdottir (Jensen 76), S Gunnarsdottir, M L Vioarsdottir (M Siguroardottir 79), Brynjarsdottir (Jonsdottir 46), Gisladottir, Thorsteinsdottir, E Vioarsdottir, Kristjansdottir, Frioriksdottir. Subs: S Siguroardottir, Atladottir, Thorvaldsdottir, Hauksdottir.
Referee: Jana Adamkova (Czech Republic).