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An antenna array is proposed as a means of achieving a space-diversity effect that partly overcomes the severity of continuous-time Rayleigh fading channels. The investigated channel is assumed to be frequency-nonselective with correlated diversity links, where the correlation is related to the array geometry and the spatial and Doppler dispersions. Further, the error performance is improved by bit interleaving and channel coding, where the encoders/channel is viewed as a serially concatenated system: a convolutional code constitutes the outer code, whereas a differential encoder and the fading channel (having truncated memory) form a joint inner code. In order to obtain a practical detector structure it is desirable to perform iterative decoding by applying some a posteriori probability (APP) algorithms. For this purpose, we propose a novel generalization of the well-known Bahl-Cocke-Jelinek-Raviv (1974) algorithm that calculates the APPs over channels having memory. Numerical results indicate that iterative decoding becomes more powerful when the exploited channel memory depth is extended. Also, the error performance is significantly improved by introducing multiple antennas. The interleaver gain is, however, seen to be quite moderate, in contrast to additive white Gaussian noise channels.