(Reuters) -A volcano erupted in southwest Iceland on Sunday, with molten lava flows reaching the outskirts of a small fishing town by midafternoon, setting some houses alight, although the town was evacuated earlier and no people were in danger, authorities said. Fountains of molten rock and smoke spewed from fissures in the ground across a wide area stretching to the town of Grindavik, where at least one house had caught fire, live video published by daily Morgunbladid showed. “No lives are in danger, although infrastructure may be under threat,” Iceland’s President Gudni Johannesson said on …