By Zoe Robert

REYKJAVIK (Reuters) - With some invoking the Norse god Thor, Icelanders draped in blue and red celebrated a famous draw against Portugal at the European Championship by spilling into the streets of Reykjavik to chant "Afram (Go) Iceland!" in the land of the midnight sun.

With the sun setting at midnight on a warm - for Iceland - evening of around 12 degrees, locals and tourists drank, sang and danced while commentators made the most of their reputation as fiery Viking islanders.

In a main square in front of the televised game, several thousand mimicked the synchronized chanting of "Afram Iceland" by their supporters at the St Etienne stadium in France.

"Now we smite them into tiny pieces of dust and destroy their goal with a ball set on fire by our volcanic thunder," tweeted Reykjavik Grapevine, an Icelandic news website and magazine.

"The unfortunate Portuguese will feel the mighty thunder of Thor's Icelandic warriors."

Daily newspaper Frettabladid's headline on Wednesday read simply "Heroes".

"I've lost my voice, I've been screaming all evening," Asta Gretarsdottir said at the main Ingolfstorg square in the capital.

Nearly 3 percent of the population - some 8,000 Icelanders -were at the stadium in St Etienne, according to local media. Up to 10 percent of the population may travel to France during the Euros.

With a population of 332,000 -- about the size of English city Leicester, the home of the Premier League's surprise champions -- Iceland is the smallest nation to qualify for the Euros. They are tied with Austria, Hungary and Portugal in Group F.

The soccer team is helping to bring back national pride and unity to a country that only a few years ago was an international pariah when its currency collapsed, banks went bankrupt and thousands protested in the streets.

For Icelandic politicians, the draw against Portugal was a victory to be savored.

"What a game. What a team. This is like victory. Congratulations, boys. Go Iceland!" Prime Minister Sigurdur Ingi Johannsson tweeted.

Midfielder Gylfi Sigurdsson, who plays for Swansea City in the Premier League, posted on Facebook an image of the crowd at St Etienne with the words "3 percent of Iceland's population are in this picture!".

Portuguese striker Christian Ronaldo's criticism of Iceland for their "small mentality" sparked outrage from many Icelanders.

"Small mentality! Really? They took you to the bakery,” tweeted Aevar Austfjord, a chef, referring to an Icelandic phrase for teaching someone a lesson.

Iceland's next game is on Saturday against Hungary, who for their own part upset Austria in a surprise 2-0 win, but for now Icelanders were all about savoring the moment.

"This is but the first chapter of #EuroSaga. Now, our players frolic in the French fields and regain their heavenly energy," the Reykjavik Grapevine tweeted.

(Reporting by Zoe Robert; Additional reporting by Jon Viglundsson; Writing by Alistair Scrutton; Editing by Niklas Pollard and Alison Williams)