Using continuum elasticity theory, we obtain the general expression for the host layer deformation of the layered intercalation compounds. In our model, an isolated intercalant is treated as a pair of equal δ-function-like forces acting in opposition direction, the magnitude of which is normalized to keep the bounding layer deformation at the intercalant site fixed to that of the intercalate sandwich in saturated intercalation compounds. We also calculate the intralayer and the interlayer interaction between the intercalants in intercalation compounds; our result shows an attractive intralayer interaction and an overall repulsive interlayer interaction. Between the two intercalants located in the adjacent galleries, the interlayer interaction sometimes becomes attractive depending on their lateral separation.