Iceland's government said that whaling could resume Friday with stricter conditions and monitoring, after it decided not to extend a temporary two-month ban imposed amid animal welfare concerns.

Iceland is one of just three countries in the world that allow commercial whaling, along with Norway and Japan.

"Whaling can resume tomorrow... (with) detailed and stricter requirements for hunting equipment and hunting methods, as well as increased supervision," the fisheries ministry said in a statement to AFP on Thursday.

Animal protection charity Humane Society International called Thursday's announcement by Fisheries Minister Svandis Svavarsdottir "a devastating and inexplicable decision".

Iceland suspended its whale hunt on June 20 after a government-commissioned report concluded the hunt does not comply with the country's Animal Welfare Act.

Recent monitoring by Iceland's Food and Veterinary Authority on the fin whale hunt found that the killing of the animals took too long based on the main objectives of the Animal Welfare Act.

Shocking video clips broadcast by the veterinary authority showed a whale's agony as it was hunted for five hours.

"It is inexplicable that Minister Svavarsdottir has dismissed the unequivocal scientific evidence that she herself commissioned, demonstrating the brutality and cruelty of commercial whale killing," the Humane Society's executive director for Europe, Ruud Tombrock, said in a statement.

The country has only one remaining whaling company, Hvalur, and its licence to hunt fin whales expires in 2023.

Another company hung up its harpoons for good in 2020, saying it was no longer profitable.

Annual quotas authorise the killing of 209 fin whales -- the second-longest marine mammal after the blue whale -- and 217 minke whales, one of the smallest species.

But catches have fallen drastically in recent years due to a dwindling market for whale meat.

Traditionally the whaling season ends in late September or early October.

Hvalur has yet to comment on Thursday's decision, but unconfirmed media reports in Iceland earlier this week said its boats were already out at sea looking for fin whales in anticipation of Thursday's announcement.