The Húsavík-Flatey Fault Zone (HFFZ) is the largest strike-slip fault in Iceland and poses a high seismic risk to coastal communities. To investigate physics-based constraints on earthquake hazards, we construct three fault system models of varying geometric complexity and model 79 3-D multi-fault dynamic rupture scenarios in the HFFZ. By assuming a simple regional prestress and varying hypocenter locations, we analyze the rupture dynamics, fault interactions, and the associated ground motions up to 2.5 Hz. All models account for regional seismotectonics, topo-bathymetry, 3-D subsurface velocity, viscoelastic attenuation, and off-fault plasticity, and we explore the effect of fault roughness. The rupture scenarios obey earthquake scaling relations and predict magnitudes comparable to those of historical events. We show how fault system geometry and segmentation, hypocenter location, and prestress can affect the potential for rupture cascading, leading to varying slip distributions across different portions of the fault system. Our earthquake scenarios yield spatially heterogeneous near-field ground motions modulated by geometric complexities, topography, and rupture directivity, particularly in the near-field. The average ground motion attenuation characteristics of dynamic rupture scenarios of comparable magnitudes and mean stress drop are independent of variations in source complexity, magnitude-consistent and in good agreement with the latest regional empirical ground motion models. However, physics-based ground motion variability changes considerably with fault-distance and increases for unilateral compared to bilateral ruptures. Systematic variations in physics-based near-fault ground motions provide important insights into the mechanics and potential earthquake hazard of large strike-slip fault systems, such as the HFFZ.
