In the central highlands of Iceland, the implementation of new measures to delimit property rights spatially and to establish new regional management plans have caused debates over the use of natural resources with regard to their exploitation, protection and ownership. This study has tried to highlight how to resolve the debate over the use of natural resources and over the definition of land ownership in Iceland with respect to traditional user-rights and ownership practised by local communities. The answer to these questions are particularly important for marginal local communities that use the commons as pasture for sheep grazing because they will directly be affected by hydropower plants and ecotourism projected by the regional development plans. Collecting data through personal interviews and analyzing legal documents with regard to ownership rights and regional planning have been the principal approaches. Firstly, the thesis discusses the theoretical context of conflict resolution within the future developmental plans for Iceland's central highlands. Secondly, the historical and traditional aspects of locally based agricultural production and the social System practiced in the commons are explored. Thirdly, the new rules for the application of the management of resources, ownership rights as well as for the management of national hydropower energy projects are analyzed. In this case, the tools for territorial conflict resolution and the process of territorial planning are discussed in their relation to the construction of hydropower plants in the commons of the Fljótsdalur valley, located between the highlands and the fjords of the eastern region. Finally, the case of Fljótsdalur is presented by focussing on the conflicting interactions between interests in and values given to either the traditional ownership rights or the regional plans for developing tourism and hydroelectric power. The results indicate tensions over how natural resources of the central highlands should be used. There is also a noticeable difference among the various lobby groups with respect to the level of comprehension of what is the area's significance for the country and its resource development. The results obtained show that monetary compensation or clarification of ownership rights is not sufficient for territorial conflict resolution. More important, rather, is the coordination of regional planning procedures, in a way which enhances cooperation among local institutions, and recognizes the interests and values that local community's associate with their environment.

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