This picture was taken at 10.52 (Swedish local time) in Stockholm on 31 December 1999 and shows an icebow. The temperature was about -10 C.
Icebows are similar to rainbows but are formed by diffraction through polarised ice crystals and not raindrops. This effect is called parhelia or sometimes sundogs.
The ice crystals are hexagonal and refract the sun light in a ring of light around the Sun. The entire ring is not often seen arc-sections being more likely.
In the picture the sun is roughly in the center of the picture and the "sundog" (a little false sun) at the right of the photograph.
Note the absence of a "rainbow" spectrum in the arc itself. In a real rainbow light is defracted through a circular drop of rain, producing many different colors. In the icebow diffraction is through a specific face of the hexagonal ice crystal, which only gives rise to one color.
See also Sundogs - mock suns or parhelia