The strategic significance of Svalbard became apparent during the Second World War. If hostile powers established themselves on Svalbard, it could have significant consequences for the security of the Soviet Union. The Soviet Northern Fleet, a crucial part of the Soviet Navy, was stationed on the Kola Peninsula. To protect it, the Soviet Union made plans to establish a so-called bastion defense to create a strategic depth that would make attacks more difficult. In the event of a war, the Red Army would advance and take control of Finnmark and North Troms, as well as Bjørnøya and Svalbard. The archipelago should not fall into enemy hands. If it did, the Northern Fleet could be trapped, and obstacles could be placed in the way of the Soviet Union's further war plans. In the event of a war, the fleet would attack American aircraft carriers and sink allied reinforcements to Norway and Europe. Additionally, the Northern Fleet's ballistic missile submarines would attack the American mainland, and a demilitarized Svalbard was crucial for the submarines to safely reach their attack positions. Therefore, protests were made against any form of Norwegian military presence, which the Soviet Union categorically claimed was in violation of the treaty.

Soviet coal mining was never profitable, leading many to believe that the extensive Soviet presence on Svalbard was solely motivated by strategic reasons. Some have even gone so far as to claim that there were plans to occupy the airport in Longyearbyen with miners from Barentsburg in the event of war. After the construction of the airport in Longyearbyen, the Soviet helicopter base at Kapp Heer was expanded, and its capacity was far greater than what the economic and research activities required. Personnel from the Soviet military intelligence were also stationed there, and it has been shown in hindsight that the facility was, in practice, a military base. The helicopters were unarmed but of a military type. They refused to communicate with the tower in Longyearbyen, and there were repeated violations of Norwegian aviation regulations.

 In 1977, one of the helicopters crashed in Hornsund. The Governor of Svalbard tried to investigate the crash, but the Soviets removed the wreckage before the accident investigation commission reached the site. There was little respect for Norwegian legislation in the Soviet communities. The dispute over Kapp Heer escalated in late summer 1978 when a mobile approach radar was deployed at the facility. Speculation spread in the press, and the news portrayed a situation where the Norwegian authorities had completely lost control. Shortly after, a Soviet reconnaissance plane collided with Werenskiold Mountain on Hopen Island. 

As the largest nationality and the only major actor alongside Norway, the Soviet Union was definitely not like all the other treaty parties. However, according to the Norwegian authorities, this should not result in any special treatment. As part of this, Soviet historians and archaeologists claimed that the Pomors had been the first to discover Svalbard, perhaps as early as the 1400s, long before Barentsz. In line with the Soviet Union's Marxist understanding of history, a narrative was constructed in which the Pomors had been robbed of their land by Western imperialists. Additionally, Norwegians were portrayed as opportunistic Arctic imperialists who had taken advantage of Russia's weakened state during the Civil War. With this, the Soviet Union insinuated that they were entitled to special treatment.

After Svalbard came under Norwegian control, Norwegian authorities largely allowed the archipelago to govern itself. This meant that the mining communities had considerable autonomy. They were interested in maintaining the significant freedom they had enjoyed prior to the war. However, with the exploration for oil and the fear of a multinational period, it became necessary to restrict this autonomy. As Norwegian authorities began introducing regulations and increasingly enforced Norwegian law, the Soviets resisted in order to defend the informal special rights they had acquired. From the Norwegian side, there was a desire for better control over activities in Svalbard, while the Soviet Union wanted to maintain the status quo, at the very least.

When the Soviet reconnaissance plane collided with the mountain wall on Hopen, a race began. If the Governor lost this race, Norwegian sovereignty and his police authority could once again be undermined. If he arrived first, he could finally show the Soviets who was in charge. The aftermath of the helicopter crash in 1977 was not to be repeated. He arrived first at Hopen, thus winning the race. But the battle was not yet over; the crash had to be investigated. Not long after, the Soviet missile cruiser Marshal Timoshenko anchored outside the territorial border.

From the Soviet embassy in Oslo, there was a demand that the crew of the ship be allowed to go ashore and retrieve the wreckage. When the government rejected the demand, the ambassador stated that the crew could go ashore and retrieve the wreckage at any time, with or without permission from Norwegian authorities. If the ambassador was serious, he effectively threatened a Soviet invasion of Hopen. The statement was taken seriously by the government, and a compromise was reached. The Accident Investigation Board was given 42 hours and took with them the most essential wreckage, after which the Soviet crew went ashore unarmed. One of the wreckage pieces taken by the investigation board was the flight recorder, the key to uncovering the cause of the accident.

In the event of an accident on mainland Norway, it was common practice to send such recorders to the United Kingdom for decoding, but doing so would risk escalating the crisis. The Soviet Union demanded its return and offered that Norwegian observers could be present during the decoding in Moscow. If the government accepted this, it would be a declaration of failure. Fortunately, after a determined effort by the Norwegian Defence Research Institute, the flight recorder was eventually decoded on Norwegian soil. With the available data, the accident investigation board managed to produce an accident report, and Norwegian legal practices were finally able to proceed without excessive Soviet obstruction. The work of getting the Soviets to comply with and respect Norwegian law still had a long way to go, but the breakthrough on Hopen showed the public that the situation was under control.

For the Soviet Union, the facilities in Svalbard were also a prestige project and a showcase where socialism could present itself in its best light. The Soviet facilities, especially Pyramiden, maintained a much higher standard than the Norwegian ones. While the miners in Longyearbyen washed themselves with water in basins, their Soviet counterparts in Barentsburg and Pyramiden had state-of-the-art mine baths and swimming pools. Frequent technical and cultural exchanges provided residents with a glimpse behind the Iron Curtain, which was by no means made of iron on Svalbard. These were excellent opportunities to display the communities' best attributes to foreigners.

Many of the residents in the Soviet settlements describe their time there as the best time of their lives. Some have even claimed that Pyramiden was the only place on Earth where communism was actually established. Tougher economic times in post-Soviet Russia led to reduced subsidies, and the Russian communities withered away. In the Operafjell accident of 1996, a significant portion of the population in Pyramiden lost their lives, and it was decided to concentrate the Russian presence in Barentsburg. There, around 400 Russians and Ukrainians still reside.

The story of the Cold War in Svalbard was primarily proof that peaceful coexistence was possible. The relationship with the Soviets was good, but not without its challenges for the administration. Considering that there were Soviet cities on the territory of a NATO country, one could say that the history could have unfolded in a far more tense direction than it did. Svalbard was in many ways a kind of Arctic Berlin where the East and West lived side by side. The difference was that there was no wall separating the communities. The Iron Curtain may have hung over the continent, but in Svalbard, the other world was just a short snowmobile ride away.