Iceland confident of economic recovery: president

UNITED NATIONS (Reuters) - Iceland's president expressed confidence on Tuesday that the natural riches of his small island state would help it recover quickly from the global financial meltdown that has devastated its economy.

The Icelandic government last week took control of the operations of three top banks and the national currency has slumped. Leading stocks plunged when trading reopened on Tuesday and an official delegation is in Moscow seeking Russian help.

But President Olafur Ragnar Grimsson told a U.N. seminar that small states like Iceland had many important assets.

"In the current global financial hurricane, Iceland and others have been reminded, to use an analogy, that when a hurricane passes over the ocean toward powerful mainlands it usually first crosses small islands where the destruction can be substantial," he said.

But, he added, "experience also shows that small states, due to their flexibility and the closely knit networks of cooperation which characterize their societies can recover surprisingly quickly."

Iceland's "long-term resources are fundamentally strong," Grimsson said. They included potential for clean geothermal and hydro energy production, strong fish stocks, large reservoirs of fresh drinking water and natural beauties that were attracting ever more tourists.

Grimsson's address to the seminar on the role of small states in international peace and security was delivered in a video. Icelandic officials said the president, who had a heart procedure last week, did not attend for medical reasons.

Iceland's president is not the head of government and has limited powers.

Despite its financial problems, Iceland is continuing to campaign strongly for an elected seat on the U.N. Security Council. It is competing against Turkey and Austria for two available European seats in a General Assembly vote on Friday.

(Reporting by Patrick Worsnip; editing by Bill Trott)