  We present results based on an XMM-Newton observation of the prototype
narrow-line Seyfert 1 galaxy I Zw 1 performed in June 2002. The 0.6-12 keV
spectrum is well described by a steep power-law (Gamma\sim 2.3) and a weak soft
blackbody component (kT \sim 200 eV) below 2 kev. The soft X-ray excess
emission is featureless and contributes only about 10% to the total X-ray
emission in the $0.6-2\kev$ band. There are tentative evidences for an iron
iron Kalpha line and an iron K edge, both from high ionized He-like iron. The
0.6-12kev continuum of I Zw 1 can be explained in terms of a blackbody (kT \sim
40eV), thermal comptonization and its reflection off the surface of an ionized
accretion disk. We note that characterizing the soft excess copmonent `above a
power law continuum' may not be appropriate due to the low energy curvature of
a comptonized spectrum. X-ray emission from I Zw 1 was highly variabile during
the observation. I Zw 1 showed a large, symmetric X-ray flare during which the
X-ray luminosity increased by about 6e43 erg/s in an interval of 2800s only.
The X-ray spectral variability was unusual during the flare. In contrast to the
general observation of spectral steepening with flux from Seyfert galaxies,
there is a clear evidence for hardening of the 0.6-10kev spectrum of I Zw 1
with increasing flux. This hardening is due to a stronger and slightly flatter
power-law component at higher flux without any change in the soft X-ray excess
component. The large flare, the accompanying spectral flattening, and the
steady nature of the soft excess component may be due to an additional flatter
power-law component during the flare possibly arising as a result of ejection
of electron plasma and the SSC process.
