This reminds me of a recent vote in the EU parlament where the No vote had to reach a certain value above 50% to carry the day. Even though the vote did end up with a No majority, it passed because the No vote didn't reach the required negativity!
Now that's true democracy.
If Icelanders don't want to join a democracy like that, negotiate until they do! After all, the politicians know what is best for the populace.
[1] https://www.techtimes.com/articles/320010/20260709/eu-parlia...
As long as they hold a confirmatory referendum before actually joining, it wouldn't matter. Also, if Iceland is a democracy the citizens could simply vote for someone else next time who wouldn't keep trying if that's not what they wanted