Iceland's pro-business government coalition held onto its majority by a single seat on Sunday with 99 percent of votes counted in a cliff-hanger election that pitted economic against environmental interests.

Some 1,000 votes from the northwest of Iceland, which has a population of just 300,000, were still to be counted.

"It's going to be really exciting to see the last results," University of Iceland political science professor Olafur Hardarson, adding that even that small number of voters had a slim chance of altering the balance of power.