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"Gleðibankinn" - Pálmi Gunnarsson
"Perhaps you're withdrawing too much from the bank of fun"
The Icelandic Final was held at the RUV TV Studios in Reykjavik on March 15th, hosted by Jónas R. Jónsson. The winner was chosen by an "expert" jury.
| 1 | Gleðibankinn | Bank of fun | Pálmi Gunnarsson | 1st |
| 2 | Þetta gengur ekki lengur | This can't go on anymore | Eiríkur Hauksson | - |
| 3 | Með vaxandi þrá | With a growing desire | Erna Gunnarsdóttir & Björgvin Halldórsson | 4th |
| 4 | Syngdu lag | Sing a song | Pálmi Gunnarsson | - |
| 5 | Gefðu mér gaum | Pay attention to me | Eiríkur Hauksson | - |
| 6 | Út vil ek | I want out | Erna Gunnarsdóttir & Pálmi Gunnarsson | - |
| 7 | Ef | If | Björgvin Halldórsson | 2nd |
| 8 | Vögguvísa | Lullaby | Erna Gunnarsdóttir | 5th |
| 9 | Mitt á milli Moskvu og Washington | In the middle between Moscow and Washington | Eiríkur Hauksson | - |
| 10 | Ég lifi í draumi | I'm living in a dream | Björgvin Halldórsson | 3rd |
Pálmi Gunnarsson was joined by Eiríkur Hauksson & Helga Möller to form the group Icy for the ESC, where they came 16th.