Parliament in Iceland has voted by a narrow majority to set in motion an application to join the European Union, after five days of gruelling debate.
Prime Minister Johanna Sigurdardottir of the Social Democrats has also been pushing for the adoption of the euro as the Nordic country's currency.
The bid must now be approved by the EU, after which Iceland's people will be asked to vote on it in a referendum. Ms Sigurdardottir said that several years of negotiations lay ahead.
The main benefits of EU membership at the moment would be the possibility of joining the exchange rate mechanism, and eventually adopting the euro. EU commission chief Jose Manuel Barroso welcomed the vote, saying Iceland was a "European country with long and deep democratic roots".
Opponents of the bid fear EU quotas could hurt Iceland's fishing industry. Correspondents say Iceland, with a population of just 320,000, has traditionally been sceptical about joining the EU.
But many people there have warmed to the idea of membership following the devastating economic meltdown which saw the top Icelandic banks collapse in a matter of days last year.
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