Ivan Perisic ended Iceland’s World Cup dream with a 90th-minute winner as Croatia racked up a third successive victory in Group D.
Iceland’s hopes of an improbable place in the knockout stages were raised when Gylfi Sigurdsson exorcised the demons of his penalty miss against Nigeria last time out with a spot-kick equaliser with 15 minutes to go, but substitute Perisic fired home right at the end, after Milan Badelj’s second-half opener, to kill off Iceland’s chances.
Iceland had taken the game to their opponents and Hordur Magnusson’s near-post flick early in the game drifted wide before he headed wide from another corner, while Sigurdsson’s one chance from a free-kick was comfortably saved by Lovre Kalinic.
Alfred Finnbogason drilled into the side-netting from distance after dispossessing Badelj and Birkir Bjarnason had a shot blocked by Kalinic from a half-cleared corner.
However, Croatia’s back-up goalkeeper saved his best effort for added time when he tipped wide Aron Gunnarson’s angled curling strike.
Badelj hit the crossbar with a long-range strike early in the second half, but the 29-year-old made no mistake moments later when the ball was cut back to him near the penalty spot.
Iceland’s response was immediate with Sverrir Ingason having a header tipped over and then hit the crossbar with another.
The pressure finally told when substitute Dejan Lovren was adjudged to have handled Sigurdsson’s cross and the Everton midfielder drilled home the penalty.
But it was another substitute, Inter Milan’s Perisic, who produced the decisive moment to set up a last-16 meeting with Denmark.