More than one thousand demonstrators have gathered outside parliament, urging the government to step down over the country's economic collapse.

Icelanders demonstrate against government.

Tuesday's protest came on the first day of parliament after the Christmas holidays. Local media say as many as 10 people were arrested. They also say police fired pepper spray at the demonstrators.

Protests against Prime Minister Geir Haarde's cabinet have become a regular fixture in the once-tranquil streets of the capital.

Especially since the island's main commercial banks collapsed last year. In October Iceland's currency plunged and its financial system collapsed under the weight of billions of dollars of foreign debt incurred by its banks.

The island's economy is expected to suffer a huge contraction this year. And unemployment is set to soar after hovering near zero in recent years.

(CCTV January 22, 2009)