Icelands strategic value is obvious. The ebb & flow of German ships to the atlantic,( not to mention an extra place for Raider captures ), The British landed in 40 & US in 41. Hitler did speak of landings with U-boats on Iceland, whether it was seriously studied by the Navy is question one. The Bigger question is, could it be done? Perhaps an airborne assault on the Brit base, in concert with a ship borne assault on the NW coast. The bay of Hunafloi is not too far from Reykyavik. Captured Norweigian ships could be sent above the Shetland patrol line, as most raiders were & beached at bay of Hunafloi,( Beached to be drained of fuel). Most likely in summer of 40 when Brits were engaged in BOB & weather - road conditions would be good. West Iceland does have connecting roads from town to town & has for a long time. If successful, anticipated allied attack to re-take Iceland would probably not take place til spring 41, when weather conditions improved, giving Germans 9-12 months to dig in & use Island operationally. Many feel Germany could not keep Iceland resupplied. Which is the next real question. Key factors are; if successful, the attackers would capture supplies of Brit defenders, some supplies would be brought by JU 52's, & some by U-boat, & some by Norweigian cargo ships. Some argue the Brits would sink supply vessels, but with local air control going to Germans, this is not as easy as one might think. & remember a standing patrol of troops,( Crete after its capture for example ), would need much less supply than an active army, a la Tunisia or Murmansk front. Nuff said, other thoughts are appreciated.