In old Icelandic and Faroese beliefs, still held by many, large rocks are the habitat for the group of beings known as elves, or 'huldufólk'. These northern elves are probably rather atypical to our eyes and have more in common with Scandinavian and European tales of "little folk" than with the elves of contemporary fantasy literature.
In his Edda, Snorri describes two groups of elves (possibly distinct from the huldufólk); the light elves (ljósálfar) and the dark elves (døkkálfar/svartálfar). Apart from their respective residences, the two worlds known as Álfheim and Svartálfheim, not much else is known about these two groups. When you consider Snorri's descriptions in more detail, and compare them to older sources, some things become clear, however; the dark elves are likely synonymous with the dwarves of Norse mythology, and the light elves (or just plain elves) seem to have some connection to the group of Norse gods collectively known as the Vanir (commonly described as fertility deities, of which Frey and Freya are the most well known). It is even somewhat probable that the light elves are in fact synonymous with the Vanir.