Iceland erupted late Wednesday - not due to a volcano - but in rapture after fans celebrated the country’s sensational advancement at Euro 2016.

Thousands of fans jumped, whooped, danced and shouted for joy on the Ingolfstorg square in the capital Reykjavik after a late goal secured Iceland a 2-1 victory over Austria - and a berth among the final 16.

Football commentator Gudmundur Benediktsson’s ecstatic commentary has gone viral on social media as he described the decisive goal: "And Theodor Elmar - he is all alone. Three against two. Emmi, get into the box! Get into the box! Emmi. Yes! Yes! [goal scored] Yes! Yes! Yes! We are winning this! We have reached the last 16. We have reached the last 16. We have won over Austria!”

"My voice is gone but that doesn't matter. We are through. Arnor Ingvi Traustason scored. Iceland 2, Austria 1. How about that?! How about that?! The final whistle has gone! I have never, ever felt this good. Arnor Ingvi Traustason secures Iceland's first victory in the European Championships. We've never lost, don't forget it, we've never lost, but the first victory has come. Iceland 2, Austria 1. Thanks for coming, Austria, thanks for coming," he said.

The triumph opens yet another chapter in the North Atlantic island nation’s football fairytale, and adds another dimension to a country usually best known for its natural wonders like volcanoes and waterfalls, and storytelling.

Prime Minister Sigurdur Ingi Johannsson, who saw the match in Paris, told public broadcaster RUV he was proud of the Icelandic team, the fans and the whole nation.

"There are no words to describe this achievement,” he said. “This is the first time a men's football team is in a major tournament - the women have done it before - but here a major chapter in the nation's sport history is being written."

Iceland co-coach Heimir Hallgrimsson said: "I guess we will change the national holiday, which is normally on June 17, by a few days. That is what this means to us."

The online edition of daily Morgunbladid headlined one of its main stories "Iceland advances after an incredible match", while Visir summed up: "Amazing victory from our boys in Paris".

One of Iceland’s greatest players, 37-year-old forward Eidur Gudjohnsen, who did not start against Austria, tweeted "I've taken part in some big games in my career. None of them compare with today. This is our moment."

The win means Iceland - a country of 330,000 people - take on heavyweight England in the knock-out stages.

The other Iceland coach, Lars Lagerback, a Swedish national who took over Iceland in 2012, and narrowly failed to qualify with the team for the 2014 World Cup in Brazil, said his side “really deserved this.”

"I’ve never lost against England, so we’ll see if that run lasts,” he told Swedish television after the match.

Lagerback, 67, who guided Sweden to the World Cup in 2002 and 2006, and was also in charge of Nigeria at the 2010 World Cup has won a great following in Iceland.

Some joke he could have been elected president of Iceland if he had contested Saturday’s presidential elections.

Outgoing president Olafur Ragnar Grimsson congratulated the team, saying it was "a great victory and the biggest moment in the history of Icelandic football."

The football fever has overshadowed the presidential election campaign and political scientist Baldur Thorhallsson told RUV voter turnout might be affected.

"Perhaps many people will be more interested in the football on election day than the elections," he said.

Thousands of Icelanders were in France, others were headed there and might not have cast absentee ballots. On the upside, the incoming president might be able to draw on the football team's success to unify the nation, he added.

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