Poa alpina; Alpine Meadow-grass - this meadow-grass species can be found anyhere on Iceland where plants do grow (except for bogs and submerged flora). It nevertheless prefers more or less moist conditions. Very often - certainly in the highlands - this species is viviparous, meaning just formed seeds germinate on the mother plant.
It is a member of the grass family (Poaceae, also known as Gramineae).