Ahem. Iceland is a very strategic location in the centre of the Atlantic sea, a good place for Arctic circle expeditions and a half-way stop to Europe. During WW2 it was used as an outpost for supply deliveries to the USSR.
Therefore invading Iceland would be a good call for any large force for strategic purposes.
I think you might also underestimate the influence both Europe and the US are able to place upon it. "Able to set its own rules" is probably a bit of an exaggeration that I would guess is derived from the awful journalism that has recently suggested that Iceland have done "great things" (jail bankers, bail out its own mortgage holders) when the journalism is infact mostly incorrect.
Iceland is really not _that_ different from Europe/US.
None of what you say indicates that Iceland is actually in Europe.
Yes, you're right that it is a convenient waypost between the North America and Europe. But the key point here is between.
You are also right that there is the ability to put pressure on Iceland from lots of places, including the USA and Europe. However compare how much independence Iceland feels with European countries of the same size. In population it is in the middle of Luxembourg, Malta, Jersey and the Isle of Man. Which of those is even remotely comparable?
I think you might also underestimate the influence both Europe and the US are able to place upon it. "Able to set its own rules" is probably a bit of an exaggeration that I would guess is derived from the awful journalism that has recently suggested that Iceland have done "great things" (jail bankers, bail out its own mortgage holders) when the journalism is infact mostly incorrect.
Iceland is really not _that_ different from Europe/US.