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In repeat-pass synthetic aperture radar (SAR) interferometry, the approximations, allowing the phase-to-height conversion, prevent high-resolution mapped relief. In this paper, we present a more general and exact formulation giving a new relationship between the interferogram phase and the target height. It is based on the interferometric SAR geometry and on a better expansion of the path length difference between the sensor and the target. This formulation emphasizes the impact of baseline uncertainties on digital elevation model (DEM) accuracy. A quantitative assessment of the required baseline accuracy is computed. The impact of orbital parameters, used in the new formulation, on interferogram generation is studied. Thus, a new simulator algorithm is developed and tested on a set of reference and simulated DEM examples. Examples of interferogram simulation and DEM generation validate this new approach in the case of a mountainous area in Mustang (Nepal).