Up to now, pets have not been allowed in social housing.
The Icelandic Food and Veterinary Authority decided to put down 250 birds which have been held in quarantine since February.
Pets will be allowed on public buses alongside their humans in the Reykjavík capital area starting tomorrow.
Strætó BS has received approval from the Ministry for the Environment for a pilot project allowing pets on public buses.
Minister of Fisheries and Agriculture Þorgerður Katrín Gunnarsdóttir will prepare a new risk assessment for the Icelandic government on the import of cats and dogs.
An amendment to health regulations now permits restaurant owners to allow dogs and cats in their establishment, subject to certain conditions.
A Swiss woman was arrested in Höfn, southeast Iceland, on Saturday evening for smuggling her cat into Iceland. The cat was found and destroyed by authorities.