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The pairwise probability of error for differential unitary space-time modulation for channels with a constant specular component and time-varying diffuse fading is derived in this paper. We consider the case where the channel varies from sample to sample within a symbol according to a first-order Gauss-innovations model. Our previous results are reviewed which show that the effect of the time-varying diffuse channel can be described by an effective SNR that decreases with time. We derive pairwise probability of error expressions using these effective SNR values, which are shown by simulation to accurately describe performance.