The epicentre of the earthquake was north of Krisuvik on the Reykjanes Peninsular, a distance of some 25 km from Reykjavik and only 15 km from the suburb of Hafnafjordur.
The Icelandic Meterological Office said in a press release that earthquakes this size occur occasionally in this area.
At the time of writing, there have been no reports of injuries or damage to property in the Icelandic press.
This is the second time this year that an earthquake has been felt in Reykjavik. A powerful quake on 29th May 2008, which originated in the southern town of Selfoss, measured 6.1 on the Richter Scale.