The island of Iceland is located at a divergent plate boundary.

Iceland is located on the Mid-Atlantic Ridge, where the North American and Eurasian tectonic plates are diverging. This divergent plate boundary is characterized by the formation of new crust as magma rises from below the Earth's surface, leading to frequent volcanic activity. Additionally, as the plates move apart, the stress can cause significant seismic activity, resulting in earthquakes. Therefore, Iceland experiences both high volcanic and earthquake activity due to its tectonic setting.

References:

Integrated Physical Sciences documents on plate tectonics and natural hazards.

Geological studies on the Mid-Atlantic Ridge and Iceland's tectonic activity.