BBC correspondent Jessica Parker was reporting from the Icelandic town of Grindavik when authorities ordered an immediate evacuation for anyone in the area.
Residents were being allowed back into the town in small numbers to quickly retrieve belongings when the evacuation order came.
Authorities later said the area around Grindavik was evacuated after sulphur dioxide was detected, sparking fears of a nearby opening in the ground.
The wider Reykjanes peninsula was struck by hundreds of earthquakes on Monday and according to scientists a volcanic eruption is expected.
There’s been an increase in earthquake activity the region surrounding the Icelandic capital, Reykjavik, since late October.
That’s due to a underground river of magma – hot liquid or semi-liquid rock – about 15km (10 miles) in length moving upwards below the earth’s surface.