Icelandic fans said they had persuaded Fischer, wanted by Washington for playing a 1992 match in Yugoslavia in violation of sanctions, to write to their government requesting residency.

"We bent the rules to invite Fischer to Iceland because he is connected to the history of Iceland in a unique way because of the match in 1972," Illugi Gunnarsson, an aide to Foreign Minister David Oddsson, told Reuters in Reykjavik on Thursday.

But he said the gesture was not meant as a criticism of Washington by Iceland, a staunch U.S. ally.

Icelandic chess fan Hrafn Jokulsson said Fischer "has been wanted for 12 years for playing chess in a country that no longer exists, according to laws that no one has been incriminated for before.

"We have been fighting for the solution of the problem, so that the old champion doesn't have to live in a prison camp in Japan or a U.S. prison," he said.

An official at Iceland's embassy in Tokyo said an embassy staffer would visit Fischer and give him the permit.

But the former champion may not find a safe haven there since Iceland has an extradition agreement with Washington, Iceland's immigration chief Georg Larusson told local media.

"If Fischer comes to Iceland the government would have an obligation to deport him if the U.S. government requests it," Morgunbladid newspaper reported, citing Larusson.

The eccentric champion was arrested in Japan last July for carrying an invalid U.S. passport, after moving around Eastern Europe and Asia to avoid deportation to the United States.

Jokulsson said many fans in Iceland remembered Fischer's duel with Russian Boris Spassky in Reykjavik in 1972 as "the chess match of all times, as the great powers fought the Cold War's most dramatic battle over the chess board in Reykjavik.

"Fischer and Spassky brought the world's attention to Iceland for the first time," he said.

After that match 29-year-old Fischer disappeared, not to play chess publicly again until 1992, when he beat Spassky once more in Yugoslavia -- earning him $3 million and a U.S. arrest order for violating sanctions as Belgrade warred with breakaway republics.

In Japan, Fischer's lawyer Masako Suzuki said detention was taking its toll and the former champion was spending "sleepless nights." The lawyer said it was possible Japan would agree to deport him to Iceland instead of the United States.

"It is not impossible," a Japanese immigration official said, adding, however, that Fischer was likely to need a valid passport. (Additional reporting by Sigga Hagalin in Copenhagen)