VESTMANNAEYJAR, Iceland -- Asmundur Palsson was perched like a sniper along the craggy cliff, carefully aiming his .22-caliber rifle down the steep, grassy slope of a 600-foot-deep cove.

"Ahhhh, yes," he whispered -- his finger on the trigger, his eye in the scope. "A black rabbit." But just before he shot at the critter poking from the hole -- whoosh -- out flew a black, white and orange little bird toward the North Atlantic Ocean. "No, it's a puffin," he cursed.

Here on this volcanic island off the southern coast of Iceland, Mr. Palsson is hunting rabbits to try to save the nation's beloved puffins. More than 10 million puffins breed here, making Iceland the world's largest puffin habitat. But in recent years, the native treasure has been threatened by pet rabbits. Both rabbits and puffins live in holes in the ground. Puffins use them four months a year to lay their eggs. The rabbits fancy them year-round to live and breed in.

And there may not be room for both. New research shows that the rabbits are disrupting the puffins' habitat and causing them to breed less. The result is a battle of existence between the puffin and the rabbit. It is also bringing a war of words between those who want to preserve the clownish-faced seabird and those who oppose shooting rabbits.

For many Icelanders, the puffin fills a special cultural niche. In an annual rite, Icelandic children greet newly hatched pufflings and carry them to the sea in tiny boxes to prevent them from getting disoriented by the city lights. Iceland also relies on the puffin for tourist dollars. Birdwatchers and tourists from across the world flock to the islands to gaze at the bird in its wild habitat.

To defend their puffins, the Icelandic government is enlisting a small army of hunters, like Mr. Palsson, to pick off rabbits one by one.

"They just multiply," says Ingvar Sigurdsson, director of the government-run South Iceland Nature Center. "If the rabbit hunters weren't shooting 600 to 700 a year, it would be a disaster."

But now some people are calling for the hunters to leave the rabbits alone. "They're trying to wipe them out of the entire island," proclaims Sigridur Asgeirdottir, a feisty, "70-something" lawyer at the Icelandic Society for the Prevention of Cruelty to Animals. The rabbits "are not doing any harm," she insists.

Ms. Asgeirdottir says the worst enemy of the puffin is not the rabbit -- but man. Every year Icelandic men band together and go puffin hunting. They use a triangular net on the end of a long bamboo pole and scour the islands for puffins. Once they are caught in the net, they are killed, sold at local markets, and served up as a delicacy on dinner plates throughout Iceland. Up to 200,000 puffins are killed every year during hunting season.

Puffin hunters say they love the seabirds, but defend the tradition, which has been passed down through the centuries.

Rabbits are not native to Iceland. Environmental researchers suspect they were imported from Spain to the island as pets about 30 years ago. Nobody knows for sure why they are now becoming peskier.

Mr. Palsson, a happy-go-lucky man with wispy gray hair, has been hunting rabbits about 10 years. He blames the problem on a local farmer who tried to start a rabbit farm -- perhaps for meat or fur -- but then gave up and let the rabbits free. Mr. Sigurdsson of the Nature Center says the problem has been mounting as more children become disenchanted by, or bored with, their pets and release them into the wild.

One thing is sure: Vestmannaeyjar is essentially rabbit heaven -- there are few predators, thousands of ready-made holes and acres and acres of untouched grassy fields for grazing. That allows them to breed like, well, rabbits.

Last year Ms. Asgeirdottir for the first time discovered that rabbit hunting was going on. She says she was horrified when she saw a local newspaper article with a photograph of Mr. Palsson "holding a dead rabbit by his ears." She adds, "He was praised like some hero because he caught this rabbit." She immediately sent a letter to the Icelandic Department of Environment, demanding that it stop issuing rabbit-hunting permits. She argues that it is not only unethical, but illegal, since rabbits are domestic animals -- like cows and sheep -- protected by law.

'Foreign Species'The government disagrees. In a letter to Ms. Asgeirdottir dated Oct. 13, 2005, the Department of Environment says that rabbits are not counted as a protected domestic animal, and in any case it reserves the right to exterminate "foreign species that are a threat to local ecosystems."

Mr. Palsson and others who want to eradicate the rabbit say the problem goes beyond posing a threat to puffins. Rabbits have a huge appetite for grass. They eat the grass around their hole, and the roots that grow into the holes. All the intensive snacking weakens the grass and causes the land to become unstable. And since puffins typically nest on steep slopes, they fear the loss of stability could eventually lead to a landslide.

In 2001, the biology department at the University of Iceland sponsored research into the puffin-rabbit conflict. Freydis Vigfusdottir, a graduate student who was the lead researcher, monitored the location and behavior of the rabbits on the island over four years. She mapped the location of the rabbits and used a plumber's camera to view inside the rabbit and puffin holes.

She found that puffin and rabbit burrows look similar to the naked eye. They are both circular holes in a grassy slope. But there are major differences. Puffins use their large beaks to dig narrow, circular tubes that tunnel about three to five feet into the ground. The rabbits move into the puffin hole when the puffins are at sea for eight months during the winter. They remodel the puffin holes to give them much wider entrances and connect the burrows with tunnels to provide escape routes.

Puffins tend to use the same hole year after year. And they are also private birds that shun the communal architecture favored by rabbits. So when they return after a winter at sea, and find a rabbit occupying their abode, they are none too happy.

Fight or FlightResearchers aren't entirely sure what happens when a puffin directly confronts a rabbit in its burrow. It is possible that they actually fight -- and the puffin would likely win, given its pointy, rock-like beak. But puffins are typically not fighters, so most researchers think they just retreat when they find their hole occupied by a rabbit. The evicted puffin either has to dig a new hole, or go the year without nesting.

In her study, Ms. Vigfusdottir concluded that about 64 percent of puffin holes in rabbit-free areas were "active" -- meaning they had puffins nesting in them. In rabbit-rich areas, about 10 percent of the puffin holes were physically occupied by rabbits, and 64 percent of the holes were "inactive" -- meaning they had neither puffins nor rabbits in them. She fears this is evidence that the rabbit is causing the puffin to breed less, threatening the bird's very existence.

Ms. Vigfusdottir thinks people who are opposed to rabbit hunting are swayed by "the cute factor."

"It's somehow inconceivable that a cute, furry animal like that -- just like your stuffed animal back from childhood -- could be bad," she says. "If it was a rat, people would go ballistic."