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Plans to build a new road in Iceland ran into trouble recently when campaigners warned that it would disturb elves living in its path. Construction work had to be stopped while a solution was found.From his desk at the Icelandic highways department in Reykjavik, Petur Matthiasson smiles at me warmly from behind his glasses, but firmly."Let's get this straight before we start - I do not believe in elves," he says.I raise my eyebrows slightly and incline my head towards his computer screen which is displaying the plans for a new road in a neighbouring town. There are two yellow circles marked on the plans, one that reads Elf Church and another that reads Elf Chapel. Petur sighs.