We present a 20 ks XMM-Newton observation of the prototypical Narrow-Line Seyfert 1 galaxy IZw1. The best-fit model to the data is a double blackbody plus a dominant power-law, on which complex soft absorption (possibly a blended edge or absorption lines) and/or OVII emission are superimposed, as well as strong Fe Kalpha emission. The iron feature in the high-energy spectra appears broad; however, on close examination of the EPIC pn data, there exists the possibility that the broad emission feature can be attributed to a neutral Fe Kalpha line in addition to a blend of He- and H-like Fe Kalpha lines. The light curve shows a strong, hard X-ray flare concentrated in the 3-12 keV band. The flare appears to induce spectral variability, showing spectral hardening to be occuring as the flare intensifies. A detailed examination suggests that the spectral variability is most likely due to an increase in the 3-12 keV flux relative to the soft flux during the flare. A difference spectrum and complete modelling of the flare and non-flare spectra show intrinsic changes only in the normalisation of the continuum components and not in their shape parameters. The timing results are consistent with the flare originating in the accretion disc corona. The iron emission line(s) do not appear to respond to changes in the continuum flux during the flare; the iron lines are stronger in equivalent width during the low-flux (non-flare) states, and weaker during the flare.
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