Water in the form of a solid takes up less spaces than as a liquid so not sure I agree... Plus there is a large part of this that is above sea level currently so that part is not current being displaced.
I agree with Firebrand (^above) that if the ice is already floating (sea ice) and it melts it will cause no other immediate displacement of volume (even if a large part of that floating ice is above sea level and even if solid water takes up less space than liquid water). That's an application of Archimedes principle and can be explained here: http://physics.stackexchange.com/questions/110645/why-does-i.... Indeed it's land ice melting that causes sea level rise. However, sea ice melting still changes the albedo and does directly contribute to climate change.
True, I was thinking that its not truly free floating sea ice and that much of it may be supported by the remaining ice its attached to (hence the crack).
Of course it floats. But that's not what I was trying to say. Go to your cup, put some ice in it and then mark the water level. Now let the ice melt and remark the water level. They will be at the same level.