Board Thread:Lore Discussion/@comment-69.145.150.129-20130814004525/@comment-64.126.171.244-20160120001322

Lore explicitly states that Saarthal was a nordic city built by Ysgamor and later sacked by the Snow Elves long before Shalidor was ever thought of. And it's to the west, not south. And it's made of stone and earth, not ice. And it's inhabited by Nordic dead, not the ice summons that Shalidor filled his fortress with.

So yeah, Saarthal is Saarthal and the Ice Fortress, just like most other Arena locations, got retconned into nonexistance in the post-Morrowind lore.