The May 25, 1987, Vatnafjoll earthquake occurred on the Mid-Atlantic plate boundary, at a junction between a transform (the South Iceland Seismic Zone) and a spreading segment (the Eastern Volcanic Zone). The South Iceland Seismic Zone has had the most destructive earthquakes in the history of Iceland with average intervals of 80-100 years and estimated maximum magnitudes around 7. The 1987 Vatnafjoll earthquake was the largest earthquake (m(b) = 5.8; M(s) = 5.8; M(w) = 5.9) in south Iceland since the 1912 magnitude 7 earthquake and is the first event sufficiently large to allow a meaningful study of source process in this geologically interesting region. Foreshocks and aftershocks of the Vatnafjoll earthquake were located with relatively good accuracy. They define an elongated N-S epicentral area, 12 km long and 4 km wide with hypocentral depths mostly between 6 and 13 km. We determined centroid source parameters of the Vatnafjoll earthquake by inverting long-period teleseismic P and SH waves. The centroid source mechanism and foreshock and aftershock distribution indicate N-S right-lateral strike-slip faulting on a near-vertical plane. The rupture initiated near the base of the crust and propagated upward along an approximately 10-km-long fault but did not reach the surface. The centroid depth is well constrained and is between 5 and 8 km depth at the 95% confidence level. The seismic moment is 9.1x10(24) dyn cm. The source has relatively short duration of 3 s, which may indicate higher stress drop than global average of earthquakes of this size. The South Iceland Seismic Zone is a 70-km-long E-W striking transform zone between two overlapping rift zones, the Eastern and Western Volcanic Zones. It is characterized by "bookshelf" type of tectonics; that is, there is no surface faulting in the direction of the transform. Instead, N-S right-lateral strike-slip faults are distributed along and perpendicular to the transform zone. The Vatnafjoll earthquake has characteristics of earthquakes in the South Iceland Seismic Zone and is probably not related directly with magmatic activity in the Eastern Volcanic Zone. The transform zone thus extends farther into the rift zone than was previously recognized.
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