The drone regulations for Iceland can be found here and here (full PDF); they include an FAQ which suggests recreational use is permitted - I have quoted a few of the points below, but I recommend you check their site for full details:
Do I need formal training and/or licence to fly a drone?
There is no requirement for special training/licence to fly drones under 25 kg, provided they are used for recreational purposes.
Is it mandatory to register the drone?
Recreational flights: No need to register.
Is insurance for drones mandatory?
Recreational use: Insurance is not mandatory.
Where are drones prohibited?
- Over a crowd of people
- Close to airports with scheduled traffic
- Close to private houses and public buildings
- Above 120 meters
- Beyond visual line of sight of the pilot (BVLOS)
Can I fly over National Parks?
For flying over National Parks you need to apply for a permit...
As to the safe wind speed for operating a DJI aircraft, you should check the specifications of your drone on the DJI website; look for the "Max Wind Speed Resistance" number on the "Specs" page (e.g. DJI Mini 2.)