Four other Brits were also badly injured in the accident, which happened at around 10am today.
Icelandic police said one child was among the dead and two among the injured.
The seven holidaymakers were in a Toyota Land Cruiser SUV that drove off a bridge in Núpsvötn just south of Vatnajökull glacier, according to local media.
The vehicle slammed through a railing on a one-lane bridge at Skeidararsandur, a vast sand plain in southern Iceland.
The car reportedly plunged around 25ft onto a rocky river bank below.
Tour guide Adolf Erlingsson was among the first on the scene.
He told reporters: "It was horrible. The car seemed to have hit the ground many meters from where it stopped.
"We struggled getting everyone out."
Police say it remains unclear what caused the driver to lose control of the vehicle.
Chief Superintendent of south Iceland Police Sveinn Kristjan Runarsso said the four survivors have been taken to hospital with serious injuries.
He added that "we haven't been able to talk to them about what happened".
He said it was not clear whether the seven people were related.
None of the victims' names have yet been confirmed.
The 1,377ft bridge over Núpsvötn was built in 1973 and is the second-longest bridge in the country, according to Visir.
It is said to have been the scene of a number of accidents in recent years and is reportedly expected to be replaced soon with a shorter bridge around a quarter of the length.
Sun Online has contacted the Foreign & Commonwealth Office for comment.
More to follow…
For the latest news on this story keep checking back at Sun Online.
Thesun.co.uk is your go to destination for the best celebrity news, football news, real-life stories, jaw-dropping pictures and must-see video.
Download our fantastic, new and improved free App for the best ever Sun Online experience. For iPhone click here, for Android click here.
Like us on Facebook at www.facebook.com/thesun and follow us from our main Twitter account at @TheSun.
Source: Read Full Article