The September 2018, \(M_w\) 7.5 Sulawesi earthquake occurring on the Palu-Koro strike-slip fault system was followed by an unexpected localized tsunami. We show that direct earthquake-induced uplift and subsidence could have sourced the observed tsunami within Palu Bay. To this end, we use a physics-based, coupled earthquake–tsunami modeling framework tightly constrained by observations. The model combines rupture dynamics, seismic wave propagation, tsunami propagation and inundation. The earthquake scenario, featuring sustained supershear rupture propagation, matches key observed earthquake characteristics, including the moment magnitude, rupture duration, fault plane solution, teleseismic waveforms and inferred horizontal ground displacements. The remote stress regime reflecting regional transtension applied in the model produces a combination of up to 6 m left-lateral slip and up to 2 m normal slip on the straight fault segment dipping \(65^{\circ }\) East beneath Palu Bay. The time-dependent, 3D seafloor displacements are translated into bathymetry perturbations with a mean vertical offset of 1.5 m across the submarine fault segment. This sources a tsunami with wave amplitudes and periods that match those measured at the Pantoloan wave gauge and inundation that reproduces observations from field surveys. We conclude that a source related to earthquake displacements is probable and that landsliding may not have been the primary source of the tsunami. These results have important implications for submarine strike-slip fault systems worldwide. Physics-based modeling offers rapid response specifically in tectonic settings that are currently underrepresented in operational tsunami hazard assessment.

Summary: A novel wetting and drying treatment for second‐order Runge‐Kutta discontinuous Galerkin methods solving the nonlinear shallow‐water equations is proposed. It is developed for general conforming two‐dimensional triangular meshes and utilizes a slope limiting strategy to accurately model inundation. The method features a nondestructive limiter, which concurrently meets the requirements for linear stability and wetting and drying. It further combines existing approaches for positivity preservation and well balancing with an innovative velocity‐based limiting of the momentum. This limiting controls spurious velocities in the vicinity of the wet/dry interface. It leads to a computationally stable and robust scheme, even on unstructured grids, and allows for large time steps in combination with explicit time integrators. The scheme comprises only one free parameter, to which it is not sensitive in terms of stability. A number of numerical test cases, ranging from analytical tests to near‐realistic laboratory benchmarks, demonstrate the performance of the method for inundation applications. In particular, superlinear convergence, mass conservation, well balancedness, and stability are verified.