Diagram of horizontal ground oscillation caused by liquefaction in the cross-hatched zone decoupling the surface layers from the underlying ground.

Figure 4 [after EERI]

The decoupled layer oscillates in a different mode than the surrounding ground causing fissures to form, and impacts to occur across fissures, and traveling ground waves (Youd, 1992).
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Loss of Bearing Strength

Diagram of structure tilted due to loss of bearing strength When the soil supporting a building or other structure liquefies and loses strength, large deformations can occur within the soil which may allow the structure to settle and tip

Figure 5 [after EERI]

Conversely, buried tanks and piles may rise buoyantly through the liquefied soil.
For example, many buildings settled and tipped during the 1964 Niigata, Japan, earthquake.
The most spectacular bearing failures during that event were in the Kawangishicho apartment complex where several four-story buildings tipped as much as 60 degrees.
Apparently, liquefaction first developed in a sand layer several meters below ground surface and then propagated upward through overlying sand layers.
The rising wave of liquefaction weakened the soil supporting the buildings and allowed the structures to slowly settle and tip.

Liquefaction weakens the soil reducing foundation support which allows heavy structures to settle and tip (Youd, 1992).

Settlement
In many cases, the weight of a structure will not be great enough to cause the large settlements associated with soil bearing capacity failures described above.
However, smaller settlements may occur as soil pore-water pressures dissipate and the soil consolidates after the earthquake.
These settlements may be damaging, although they would tend to be much less so than the large movements accompanying flow failures, lateral spreading, and bearing capacity failures.
The eruption of sand boils (fountains of water and sediment emanating from the pressurized, liquefied sand) is a common manifestation of liquefaction that can also lead to localized differential settlements.

Increased Lateral Pressure on Retaining Walls
If the soil behind a retaining wall liquefies, the lateral pressures on the wall may greatly increase. As a result, retaining walls may be laterally displaced, tilt, or structurally fail, as has been observed for waterfront walls retaining loose saturated sand in a number of earthquakes.