REYKJAVIK, Iceland -- President Reagan and Soviet leader Mikhail Gorbachev open two days of meetings today with a private chat in a reputedly haunted house overlooking a picturesque bay.
The two men begin their second summit seated in brown leather chairs in the white, wood-frame, 77-year-old Hofdi House, located near the downtown area of this city of 90,000.
Reykjavik Mayor David Oddsson will welcome Reagan and Gorbachev to Hofdi House, and the two leaders will be shown into a large pine-paneled room with a panoramic view of Faxa Bay and the mountains beyond.
They will initially be seated with their backs to the huge picture windows with a small table holding a floral arrangement between them, a setting apparently designed for a 'photo opportunity.'
But it will not be the 'fireside summit' of Geneva, where the two men held their first meeting in November 1985, when their long conversations took place before a roaring fire.
The house's small, grey stone fireplace does not work. Like 80 percent of the country's housing, the meeting place is warmed by naturally heated water from hot springs.
By comparison to Geneva, where the meetings alternated between a 17th century chateau and the formality of the Soviet diplomatic compound, the surroundings are modest.
Hofdi House was built in 1909 by the French consul general and later had a series of owners, including famed Icelandic poet Einer Benediktsson, who named it for his childhood home. In 1938, the British consul moved in and numbered among his guests Winston Churchill and Marlene Dietrich.
Britain sold the house to the local government in the early 1950s after Ambassador John Greenway complained of 'noises in the night' he attributed to ghosts.
Popular legend has it that the spirits were ancient Viking warriors whose house on the same spot had burned to the ground. It is also said the ghosts like to dip into the liquor cabinet.
The house is also unusual because it is built of wood. Most of the dwellings in the windswept, treeless land are concrete.
Reagan and Gorbachev were expected to deliver prepared opening statements, with consecutive translations.
After their initial meeting for the benefit of photographers, the two leaders will repair to a smaller sitting room with a similar seating arrangement of leather chairs.
A nearby table, in the same Danish modern style as the other furnishings, can accommodate senior staff members and another room can seat the full delegations from both sides around a long blond conference table.
Both sides quickly agreed to the site because of its isolation and facilities that allow Reagan and Gorbachev to have their long talks.
The only real conflict developed over the bathroom arrangements. There are two bathrooms in the basement, one slightly larger than the other and more elegantly appointed.
Caretaker Magnus Oskarsson said there was some discussion among advance teams as to which bathroom would fly which flag. It was settled when a Soviet official threw up his hands and declared, 'This is ridiculous.'
It was then agreed the big bathroom would be available on a first-come, first-served basis.