Learn Icelandic: Fyrirgefðu, ég skil ekki.

In English, we use the helper word "do" for negatives, like "I do not understand." Icelandic does not use "do" this way. You just take the verb skil (understand) and put ekki (not) right after it, making it literally "I understand not."

Does fyrirgefðu mean "sorry" or "excuse me"?

It can mean both! It comes from the verb fyrirgefa, which literally means "to forgive." The -ðu at the end is actually a shortened form of þú (you). So you are literally saying "forgive thou." Use this form when speaking to one person informally.

If the dictionary word for "understand" is skilja, why is it skil here?

Skilja is the infinitive (the "to" form, as in "to understand"). When you say "I understand," the verb changes to match the subject ég (I). For this verb, you drop the -ja ending, leaving just skil.

How do I pronounce the second "f" in fyrirgefðu?

Even though it is spelled with an "f", it is pronounced like an English "v" sound. In Icelandic, the letter "f" often makes a "v" sound when it comes in the middle of a word between vowels or certain consonants.