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In this work we present a serial concatenation of differential encoder 8-PSK with Reed Solomon (RS) code and iterative decoding to get the maximum performance from this combination. The differential encoding is often used in conjunction with noncoherent demodulation to overcome carrier phase synchronization problems in communication systems employing M-ary phase shift keying (MPSK), in spite of the degradation in performance relative to coherent systems. In this work, we show that when differential encoding is combined with RS encoding and interleaving, this degradation is reduced due to the iterative decoding. We also present a soft input soft output (SISO) decoder for RS codes based on the Chase algorithms for binary block codes. The receiver in the simulations, is a serial concatenation of maximum a posteriori probability (MAP) demodulator, de-interleaver and the new RS SISO decoder.