A method for distributed computations for fault-diagnosis in a system whose fault propagation model has deterministic couplings between faults and symptoms includes creating a 'relation graph' in which the nodes correspond to the potential faults, with two nodes connected by a 'relational link' if their corresponding faults have an observed symptom in common. The relation graph is then partitioned into several domains, while minimizing the number of cross-domain relational links, which correspond to cross- domain symptoms. In each domain, all the optimal local solutions to the domain's sub- problem are first determined, and then a combination is selected of the local solutions, one from each domain, that explains the maximum number of cross-domain symptoms, where the optimal solution is supplemented, if necessary, with additional faults to explain any remaining unexplained cross-domain symptoms, determining also a bound on the deviation from optimality of the global solution.