When Snorri arrived in Norway for the second time, it was clear to the king that he was no longer a reliable agent. The conflict between Haakon and Skúli was beginning to escalate into civil war. Snorri stayed with the jarl, or chief, and his son and the jarl made him a jarl hoping to command his allegiance. In August 1238, Sighvatur and four of his sons (Sturla, Markús, Kolbeinn, and Þórður Krókur, the latter two being executed after the battle), were killed at the Battle of Örlygsstaðir in Iceland against Gissur Þorvaldsson and Kolbein the Young, chiefs whom they had provoked. Snorri, Órækja, and Þorleifur requested permission to return home. As the king now could not predict Snorri’s behavior, permission was denied. He was explicitly ordered to remain in Norway on the basis of his honorary rank. Skúli on the other hand gave permission and helped them book passage.
Snorri must have had his own ideas about the king’s position and the validity of his orders, but at any rate he chose to disobey them; his words according to Sturlunga saga, ‘út vil ek’ (literally ‘I want out’, but idiomatically ‘I will go home’), have become proverbial in Icelandic. He returned to Iceland in 1239. The king was distracted by the necessity to confront Skúli, who declared himself king in 1239. He was defeated militarily and killed in 1240. Meanwhile, Snorri resumed his chieftainship and made a bid to crush Gissur by prosecuting him in court for the deaths of Sigvat and Sturla. A meeting of the Althing was arranged for the summer of 1241 but Gissur and Kolbein arrived with several hundred men. Snorri and 120 men formed around a church. Gissur chose to pay fines rather than to attack.
Meanwhile, in 1240, after the jarl’s defeat, but before his removal from the scene, Haakon sent two agents to Gissur bearing a secret letter with orders to kill or capture Snorri. Gissur was being invited now to join the unionist movement, which he could accept or refuse, just as he pleased. His initial bid to take Snorri at the Althing failed.
Hallveig died of natural causes. When the family bickered over the inheritance, Hallveig’s sons, Klaeing and Orm, asked assistance from their uncle Gissur. Holding a meeting with them and Kolbein the Younger, Gissur brought out the letter. Orm refused. Shortly after, Snorri received a letter in cipher runes warning him of the plot, but he could not understand them.
Gissur led seventy men on a daring raid to his house, achieving complete surprise. Snorri Sturluson was assassinated in his house at Reykholt in autumn of 1241. It is not clear that he was given the option of surrender. He fled to the cellar. There, Símon knútur asked Arni the Bitter to strike him. Then Snorri said: Eigi skal höggva!—”Do not strike!” Símon answered: “Högg þú!” — “You strike now!” Snorri replied: Eigi skal höggva!—”Do not strike!” and these were his last words.
This act was not popular in either Iceland or Norway. To diminish the odium, the king insisted that if Snorri had submitted, he would have been spared. The fact that he could make such an argument reveals how far his influence in Iceland had come. Haakon went on suborning the chiefs of Iceland. In 1262, the Althing ratified union with Norway and royal authority was instituted in Iceland. Each member swore an oath of personal loyalty to the king, a practice which continued as each new king came to the throne, until absolute and hereditary monarchy was formally accepted by the Icelanders in 1662.