"Croatia is still a favorite to advance, but this is the game where better team does not win every time," Sigurdsson said.
The stunning success of Iceland's team coincided with the appointment of coach Lars Lagerback in October 2010.
At one stage, the team was ranked below Liechtenstein, but Lagerback's experience of guiding his native Sweden to two straight World Cups has quickly shone through and Iceland finished second in Group A behind Switzerland in 2014 qualifying.
"Playing at home, everybody expects them to win, so I think the pressure is much, much more on the Croatian team than our team," Lagerback said in the Croatian capital. "As I said to the players, I think we are in a win-win situation. We have nothing to lose. We must give a very good performance and if we do that we have a chance to qualify for Brazil."
"I am aware that Croatia will try to pressure from the start, but it also comes with potential hazards," he said. "If we score, it would be tough for them then."
Last Friday in Reykjavik, Iceland overcame the second-half sending-off of Olafur Skulason to hold on for the nil-nil draw against Croatia, keeping the small nation in contention for a place at the World Cup.
"Result in the first leg gives opportunity to both teams and all options are still opened," Sigurdsson said. "Surely we wanted to score in Reykjavik at least once, but we feel it was huge to keep 0-0 after playing 40 minutes having one man less on the pitch."
Although Croatia suffered two consecutive defeats, against Scotland and Belgium, at home and managed only one point in their last four qualifying group matches, the optimistic remarks by Iceland players appeared to irritate the Croats.
After all, Croatia was a World Cup semifinalist in 1998 and qualified to seven out of nine major world and European tournaments since becoming an independent state in 1991.
"Iceland is very solid team, but I feel quality is on our side, on every part of the pitch," Croatia striker Ivica Olic said. "I am aware that they are high on expectations, full of enthusiasm, but to be honest, I have no idea where their optimism comes from."
"We are better team, we will score more than once, we will win and go to Brazil," a confident Olic said.
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Associated Press writer Dusan Stojanovic contributed to this report.