REYKJAVIK, Iceland (AP) _ Iceland is roughly midway between Moscow and Washington and has immense geopolitical importance for strategic control of the North Atlantic naval lanes. But with only 240,000 people, the Icelanders could hardly mount a credible military force.

In 1918, when still under the Danish crown, they declared themselves neutral. In wartime 1941 Britain occupied Iceland with no more than token opposition. Iceland is a founding member of NATO, but under a 1951 agreement, the United States is responsible for Iceland's defense.

The NATO base at Keflavik, 25 miles southwest of here, is manned by 3,000 U.S. Air Force and Navy personnel. With their 2,500 dependents, they make up the sixth largest urban area in this sparsely populated country.

Keflavik may be the only NATO base that runs partly on Soviet fuel. Iceland imports 70 percent of its fuel from the Soviet Union, and the base buys its fuel in Iceland.

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The media attention for the summit has given remote Iceland a rare flood of exposure to the world. It also drew Icelanders out of the woodwork and the countryside to help spruce up Reykjavik and back up the country's 500-strong police force to provide security.

Among those pressed into duty were ski patrol people from villages outside the capital. Dressed in orange, they provided an outer ring of security for Hofdi House, the bayside site of the summit sessions.

''When everyone goes home, we will wait for the call when they need us next,'' said 23-year-old Thordur Palsson. Then, pausing and reflecting on his words, Palsson made clear he was referring to the missions of mercy that are the patrol's main mission - not guarding summits. ''The ski club, I mean.''

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Reykjavik, only about 165 miles south of the Arctic Circle, is not the frozen Arctic in mid-October, but the weather can be startling. Icelanders tend to explain earnestly that the climate of their island is moderated by the Gulf Stream, and it's as moderate as any country in Western Europe.

Maybe. To take one half-day's weather as an example, there were a few hours of sunny and moderate weather Saturday afternoon.

Before that came a rattle of hail - ''Nothing to take note of,'' volunteered a hotel doorman who was earning his keep bracing the door against a gale.

Reporters trying to characterize the weather for the first summit meeting could have used rain, showers, gales, snow and sunny in their descriptions, and all would have been correct at one or more times.

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A reporter whose hotel room phone was connected direct to the Moscow telephone system discovered that Soviet officials were not above bartering. By letting a Kremlin official call his wife, the reporter was rewarded with a copy of Newsweek magazine not yet available in Iceland.

The luck of the draw put three Associated Press reporters in the Saga Hotel as it was gradually transformed into a headquarters for the Kremlin delegation that did advance spadework for Gorbachev.