The Netherlands fell to another surprising loss and fellow continental powers Italy and Belgium also struggled in European Championship qualifying Monday, while Croatia showed off its goal-scoring credentials.
Meanwhile, Wales stayed atop Group B with a 2-1 win over Cyprus and is on course to qualify for its first major championship, with the 2016 tournament in France expanded to 24 teams for the first time.
Swansea midfielder Gylfi Sigurdsson scored both goals as Iceland beat the Netherlands 2-0 to hand coach Guus Hiddink his third loss in four matches since taking over after the World Cup.
The win kept Iceland perfect in three qualifiers and left it level atop Group A with the Czech Republic, which got its third straight win by beating Kazakhstan 4-2 in Almaty.
Italy labored to a 1-0 win at tiny Malta, where Graziano Pelle scored on his debut. The Azzurri are tied for the Group H lead with Croatia, which routed Azerbaijan 6-0.
Belgium trails Wales after a 1-1 draw at Bosnia-Herzegovina.
The top two finishers from the nine groups qualify automatically. The best third-place team also qualifies automatically, and the other eight can qualify through a playoff.
Iceland beat the Netherlands for the first time in 11 meetings to heap pressure on Hiddink.
Sigurdsson scored scored twice before the break. He converted from the penalty spot in the 10th after Stefan de Vrij had brought down Birkir Bjarnason and volleyed powerfully into the roof of the net in the 42nd after the Dutch defense failed to clear a corner.
"It really is painful that we lost here," said Dutch captain Robin van Persie.
But he refused to blame Hiddink.
"Guus is a fantastic coach," Van Persie said. "We are all working as hard as we can to play well."
Turkey remained anchored to the bottom of the group with Kazakhstan after gaining its first point with a 1-1 draw at Latvia.
After opening its campaign with a 2-1 win over the Netherlands and beating Turkey by the same score on Friday, the Czechs wrapped up victory over Kazakhstan inside an hour thanks to goals by Borek Dockal, David Lafata and Ladislav Krejci.
The hosts showed off their prowess at set pieces with two late goals by Yuri Logvinenko from corners, on either side of a fourth Czech strike from Tomas Necid.
In Latvia, Bilal Kisa opened the scoring for Turkey shortly after halftime with a long-range shot and Valerijs Sabala equalized with a 54th minute penalty.
World Cup qualifier Bosnia-Herzegovina is in trouble after earning only two points from three games, allowing a victory over Belgium to slip away through the fingers of goalkeeper Asmir Begovic, who fumbled an easy second-half shot from Radja Nainggolan in a 1-1 home draw.
Meanwhile, Wales consolidated the lead in the group by beating Cyprus 2-1 to sit one point ahead of Israel, which swept past Andorra 4-1.
Wales has seven points from three games with Israel on six and Belgium on four from two games. Cyprus has three points.
In the matchup of the only two nations from the group who reached the World Cup finals, Bosnia took the lead in the 28th through captain Edin Dzeko before Belgium got the equalizer through Nainggolan in the 51st minute.
"This is a difficult away game, so this is a solid result," said Belgium captain Vincent Kompany.
In Cardiff, Wales took a two-goal lead within 23 minutes through early strikes from substitute David Cotterill and Hal Robson-Kanu and somehow still made it a cliffhanger after Vincent Laban got Cyprus back into the game by halftime and Wales midfielder Andy King was sent off in the 47th.
In Andorra, Omer Damari scored a hat trick for Israel and Tomer Hemed added a penalty strike in injury time for the easy win.
Italy hit the goal frame four times but only Southampton forward Pelle could truly find the target against 155th-ranked Malta.
Making his international debut at the age of 29, Pelle took advantage of a loose ball inside the box following a corner in the 23rd minute.
Both Malta and Italy finished with 10 men. Malta captain Michael Mifsud was shown a direct red card for a foul on Alessandro Florenzi in the 27th even though replays showed there was hardly any foul at all.
Still, Malta put up stiff defensive resistance the rest of the way and Italy defender Leonardo Bonucci was sent off for a last-man foul on Andre Schembri in the 73rd.
In Croatia, Ivan Perisic scored twice and Andrej Kramaric, Marcelo Brozovic, Luka Modric also added goals. Plus, there was an own goal from Rashad Sadygov
Also, Norway beat Bulgaria 2-1 with goals from Tarik Elyounoussi and Havard Nielsen.
Croatia and Italy lead with nine points each, Norway has six, Bulgaria three and Malta and Azerbaijan zero.
"Having points in the table should give us confidence," Italy coach Antonio Conte said. "We won but we could have been more decisive in front of the goal. There's margin for improvement."