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An online blind source separation algorithm, which is a special case of the geometric algorithm by Parra and Fancourt (Book chapt. in: Noise Reduction in Speech App., Ed. Gillian Davis, CRC Press LLC, 2002), has been implemented for the purpose of separating sounds recorded by microphones placed at each side of the head. By using the assumption that the position of the two sounds are known, the source separation algorithm has been geometrically constrained. Since the separation takes place in a non free-field, a head-related transfer function (HRTF) is used to simulate the response between microphones placed at the two ears. The use of an HRTF, instead of assuming free-field, improves the separation by approximately 1 dB, compared to when free-field is assumed. This indicates that the permutation ambiguity is solved more accurately compared to when free-field is assumed.