The ghost that reportedly once haunted the house where President Reagan and Soviet leader Mikhail Gorbachev are expected to meet is said to have been a young woman's spirit who knocked pictures off walls, opened doors and caused mysterious noises.

As recently as the 1970s, a picture in the dining room supposedly fell off its hook for no apparent reason, according to Brian Holt, a retired British diplomat familiar with the legend. He was unsure of the exact date of the incident.

Skeptics suggested that the mysterious happenings in the white two-story house probably were due to its location above underground hot springs that create pressures in the earth and occasionally cause the structure to shiver or creak.

According to Holt and a biography of one of the dwelling's early owners, there are at least two versions of the origin of the ghost in the 77-year-old Hofdi House, which is owned by the city government and used for receptions.

One account says the spirit is that of a young servant who committed suicide while working for a wealthy poet. The poet later bought the house and the ghost followed him there. Another account is that the spirit is of a woman whose body washed ashore in front of the house overlooking this city's icy bay.

The government here adopted an amused attitude toward a surge of media interest in the notion that Reagan and Gorbachev may be joined in their talks by an uninvited observer from another world. "We do not confirm or deny that the Hofdi has a ghost," Foreign Ministry spokesman Sveinn Eldon said.

Prime Minister Steingrimur Hermannsson said almost regretfully today that modernization had weakened Icelanders' traditional belief in elves and ghosts.

"We have lost contact with those who supposedly live in the rocks and houses," Hermannsson said in an interview. He confirmed that the two superpower leaders were likely to meet in Hofdi House, but said final word was awaited from Moscow.

Holt said that John Greenway, who was Britain's top diplomat in Iceland at the time, persuaded London to sell the house in 1952 because a ghost had made it uninhabitable.

Holt, an assistant to the mission at the time, said Greenway insisted that "noises went bump in the night, doors opened and pictures kept falling off walls."