Iceland remain top of Group A but now have 20 points, one ahead of the Czechs, who are also through to next year's tournament and face Turkey later on Saturday.
The Netherlands, who beat Kazakhstan 2-1, are in third on 13 points with the Turks a point further back. Latvia, who have long been out of contention, are second-bottom with five points.
Iceland started aggressively with Kolbeinn Sigthorsson opening the scoring after five minutes, pouncing to fire home the rebound from Gylfi Sigurdsson's free kick.
Sigurdsson scored himself just before the half-hour mark, picking up the ball in his own half and running at a retreating Latvian defence before drilling a low shot past Andris Vanins.
But Iceland switched off in the second half, allowing Aleksandrs Cauna to reduce the deficit in the 49th minute before Valerijs Sabalas equalised with a deft volley in the 68th.
The top four all meet in the final round of games on Tuesday, with outright group victory within Iceland's grasp if they can win away to Turkey, while the struggling Netherlands host the Czechs as they seek to secure third spot.
(Reporting by Philip O'Connor; Editing by Ken Ferris)
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