We present results from a seismicity study in the Gulf of Cadiz, one of the major potential source regions of Tsunamis close to the European coast. Between the summers 2007 and 2008 24 broadband ocean-bottom seismometers and the GEOSTAR deep sea observatory was deployed in the area within the framework of EU funded project NEAREST (Integrated observation from NEAR shore sourcES of Tsunamis: towards an early warning system; GOCE, contract n. 037110). In this contribution we focus on 36 of the larger events located by the Institute of Meteorology (IM) of Portugal inside the OBS network (magnitude up to ML 4.7). We re-located the events using only the OBS recordings and compare the results to the previous land-based locations. In contrast to the preliminary bulletin of IM, most of these events do not occur in the crust, but as deep as 40 to 60 km within the oceanic lithosphere. They form two clusters of events in the vicinity of the Horseshoe Fault Zone, one of the major faults identified in the bathymetry charts. Furthermore, focal mechanisms were analysed by P wave polarities, showing the potential to study source kinematics of low-magnitude earthquakes by means of OBS networks.