COPENHAGEN (Reuters) - Iceland plans to ease some of its coronavirus lockdown restrictions by allowing hair salons, museums and schools to reopen in early May, but its government said night clubs, gyms, bars and swimming pools will remain closed.

Measures such as a two-meter social distancing rule would remain in place, while the limit on large gatherings would be loosened from 20 to 50 people on May 4, the Atlantic island's government said in a statement on Tuesday.

"The outbreak is thought to have reached its peak and is now moving down, as a result of wide-ranging containment and mitigation measures," it said.

Iceland's chief epidemiologist said last week the coronavirus outbreak was showing clear signs of slowing, after the country employed a rigorous testing and tracing strategy.

The government says more than 1,700 Icelanders have been diagnosed with the coronavirus and over 100 have been hospitalized.

(Reporting by Nikolaj Skydsgaard; Editing by Alexander Smith)