Iceland is monitoring rumbling at the Bardarbunga volcano for a second week after it yesterday retracted an announcement of an eruption and eased a warning to airlines over a possible ash plume.

The national police moved back to an “alert phase” from an “emergency phase” and removed restrictions on aviation, the Civil Protection Agency said in a statement yesterday. The area suffered a magnitude 5 quake last night while there were no signs of volcanic tremor, according to a status report yesterday from Iceland’s Met Office.

The alert level was eased after a flight over the area revealed no eruption had taken place even as rumbling at the volcano, located beneath Europe’s largest glacier, intensified. Warnings of an eruption on Aug. 23 raised concerns airlines may face a repeat of disruptions in 2010 when an ash cloud spewed from the Eyjafjallajokull volcano forced carriers to cancel more than 100,000 flights. Ash is a danger to jets because the glass- like particles can hurt engines.

“There are no indications that the activity is slowing down, and therefore an eruption can’t be excluded,” the Met Office said yesterday. “Observations show that a sub-glacial eruption did not occur yesterday. The intense low-frequency seismic signal observed yesterday has therefore other explanations.”

The police said that restrictions on roads and areas in Jokulsargljufur canyon up to Dettifoss waterfall would still be in effect, as well as closures in the highlands north of the Vatnajokull glacier.

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik at valdimarsson@bloomberg.net To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net John Simpson