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We propose a new cross-layer design employing the predictability of Rayleigh channels to improve the performance of ad hoc networks. In addition, we propose a Markov model for Rayleigh channels and an innovative Markov model for IEEE 802.11 distributed coordination function. By combining these two models, we derive the theoretical expressions for network throughput, packet processing rate, packet loss probability, and average packet delay under Rayleigh channels. The simulation of the proposed cross-layer design is also carried out. It is shown that the new approach improves the network throughput, reduces unnecessary packet transmissions and therefore reduces packets lost. We also show that there is a close match between the analytical and the simulation results which confirms the validity of the analytical models.