Iceland said Friday it would suspend work at its embassy in Russia as of Aug. 1, the first country to do so, and asked Russia to limit its operations in Reykjavik.
"The current situation simply does not make it viable for the small foreign service of Iceland to operate an embassy in Russia," Foreign Minister Thordis Gylfadottir said.
AFP's bureau in Moscow said Iceland was the first country to make such a move.
The foreign ministry stressed that the decision "does not constitute a severance of diplomatic relations."
But since commercial, cultural and political ties with Russia were "at an all-time low," maintaining embassy operations in Moscow was "no longer justifiable," it said.
Iceland said the Russian ambassador had been summoned and "requested that Russia limit the operations of its embassy in Reykjavík ... and that the level of diplomatic representation be lowered."
Gylfadottir said she hoped conditions would "someday allow us to have normal and fruitful relations with Russia, but that depends on decisions taken by the Kremlin."
The foreign ministry said Iceland operates 18 embassies in foreign capitals, "prioritizing their location in line with the extent of economic, political and cultural ties or development cooperation."