Seven people were in the car that fell about six metres (20 feet), "and three of them did not survive the accident," South Iceland police commissioner Grimur Hergeirsson told AFP.
"The other four were transported by helicopter to hospital in Reykjavik," he said.
Chinese tourists injured in Iceland bus accident
Local media reported that one of the dead was a child, and said the four injured were in critical condition.
Police told AFP that "at least four of the involved were British citizens", while local media reported that all of the passengers in the Toyota Land Cruiser were British nationals.
The cause of the accident was not immediately known.
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